U.S. Adds 162,000 Jobs in August; Economist Mike Fratantoni Weighs In

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Total nonfarm payroll employment increased by 162,000 in August and the unemployment rate was unchanged at 4.1%, per the U.S. Bureau of Labor Statistics.

Employment increased in food/drink services and local government education. The information industry lost jobs.

The change in total nonfarm payroll employment for June was revised up by 11,000, from 20,000 to 31,000. The change for July was revised up by 44,000, from 23,000 to 21,000. With those revisions, the two months’ data was revised up by 55,000.

“The unemployment rate remained at 4.1%, even though the labor force participation rate increased by two-tenths of a percentage point, indicating that more people were actively looking for work. The unemployment rate decreased for workers with less than a high school education, suggesting the jobs being created are lower-wage positions, and this change in the mix of jobs is likely a factor in the slowdown in overall wage growth, which dropped to 3.1% in August. Note that wage growth is running below the pace of inflation, which will depress back consumer spending if this persists,” said MBA SVP and Chief Economist Mike Fratantoni.

“The JOLTS survey results for July showed a still-slow hiring rate, as employers remain cautious amid multiple uncertainties in this environment,” Fratantoni continued. “We remain in a low-hire/low-fire job market, but overall, this report confirms that the job market is resilient. Next week’s inflation report is likely to be the key driver of the FOMC’s decision regarding whether to hike at their September meeting.”