Like the weather in some parts of the country, U.S. payrolls cooled a bit in August as the new BLS jobs report numbers — released this morning — came in lower than economists were expecting.
— CareerBuilder (@CBforEmployers) September 2, 2016
As you may know, following each month’s BLS jobs report, we read dozens of news reports, scour the web, and break what we find down to three key talking points you can use. Whether you’re taking a break at the office water cooler or conversing with peers in the industry, you’ll have three conversation starters in your pocket.
Here’s the News You Can Use From Today’s Release:
1. Job gains slowed down in August. Economists had predicted that today’s BLS job gains would be somewhere in the 180,000 range. In reality, the 151,000 additional jobs came up short by about 29,000. To put that in context, more than 270,000 jobs were added in each of the prior two months. So what does this mean for the probability of a rate hike?
According to CNBC:
“We had a couple above numbers in the last two months. This is a below-average number,” said Jeff Kleintop, chief global investment strategist at Charles Schwab. “All that suggests the job market is OK, but it probably does put September off the table” for an interest rate hike.
2. What about wages? While there is progress being made on the wage front, the pace of growth has still been weaker than expected.
According to Business Insider:
Average hourly earnings rose 0.1% month-on-month, less than the 0.2% forecast, and increased by 2.4% year-on-year (versus 2.5% expected). Pantheon Macroeconomics’ Ian Shepherdson noted in a preview that when the survey week precedes the 15th of the month — payday for many people — some employers fail to report earnings.
According to The New York Times:
The jobless rate has been halved in the last seven years and consumer spending remains strong, but wages have only recently begun a slow climb.
According to The Wall Street Journal:
…annual growth slowed from 2.7% the prior month, the best gain in seven years. The slower growth could reflect the mix of hiring in August tilting toward typically lower-paying fields.
3. There’s just something about August. According to CNBC:
August has been a notoriously volatile month for the jobs numbers. The previous five reports have been revised upwards by an average of 71,000. In 2011, the initial report was zero, which later was revised up to 107,000. Goldman Sachs economists attribute the statistical noise to the start of the school year.
According to Bloomberg, which calls it the “August Curse”:
The payrolls data were contending with a pattern of August disappointment, with the survey median overshooting the first print for the month in each of the last five years, by an average 47,000. Low response rates in a popular vacation month and difficulty adjusting for seasonal effects at the start of the school year could be to blame.