Nonfarm payrolls increased by 187,000 in August, ahead of the estimate for 170,000. The counts for June and July were revised considerably lower. However, the unemployment rate was 3.8%, up significantly from July and the highest since February 2022. Healthcare showed the biggest gain by sector, adding 71,000. Other leaders were leisure and hospitality, social assistance, and construction. Average hourly earnings rose 0.2% for the month and 4.3% from a year ago, both slightly below forecasts. The unemployment rate was 3.8%, up significantly from July and the highest since February 2022, and estimates for previous months showed sharp downward revision. That increase in the jobless level came as the labor force participation rate rose to 62.8%, the highest since February 2020, just before the Covid pandemic declaration.
A more encompassing unemployment measure that counts discouraged workers as well as those working part-time for economic reasons jumped to 7.1%, a 0.4 percentage point increase and the highest since May 2022.
Average hourly earnings increased 0.2% for the month and 4.3% from a year ago. Both were below respective forecasts of 0.3% and 4.4% and another possible sign that inflation pressures are easing.
The July estimate moved down by 30,000 to 157,000. June was revised lower by 80,000 to 105,000, making that the smallest monthly gain since December 2020.
While the labor continues to show signs of cooling, a desired effect of interest rate hikes, we continue to see demand for quality skills and labor through out our client community.