U.S. job growth slowed in August but manufacturing perked up and economists saw the report as more likely a sign of temporary weakness in the labor market than a long-term trend.
The Labor Department on Friday said employers added 156,000 jobs last month while the unemployment rate rose to 4.4% from 4.3%. The job gains for June and July were revised down to 210,000 from 231,000, and to 189,000 from 209,000, respectively.
Analysts had expected approximately 200,000 new jobs in August but as the Los Angeles Times reports, “Job creation last month was still more than enough to absorb the growth in the working-age population. The unemployment figure remains just shy of a 16-year low, and the economy this summer entered its ninth year of expansion.”
Economists also noted that hiring tends to be volatile in late summer. “It may not be until October and November when we are able to get a clear picture on recent hiring momentum,” Michael Gapen, chief U.S. economist of Barclays, told USA Today.
The manufacturing sector was a bright spot in August, adding 36,000 jobs, much of them in the auto industry. Jobs in construction, healthcare and industries all grew, while employment dipped in government and information technology.
Gus Faucher, chief economist at PNC, said August’s relatively modest progress does not indicate serious trouble ahead. “Businesses are seeing stronger demand, and they need more workers to keep up with that,” he told The Washington Post.
But he and other economists are concerned about the continued sluggishness in wage growth. Average hourly earnings rose just 3 cents in August to $26.39, down from the 9-cent increase in July. Compared with a year ago, the average pay last month was up 2.5% — the same modest pace in past months.
“With U.S. consumers already paying a little more for gasoline, if job growth and earnings should slow further, the crimp to economic growth will likely be more lasting,” the Times said, noting that on Friday, Macroeconomic Advisers shaved 0.2 percentage point from its third-quarter growth forecast because of the unexpected weakness in employment, hours worked and earnings in August.