Fed will like most of August’s jobs report
WASHINGTON — The nation’s job market last month delivered what the Federal Reserve and nervous investors had been hoping for: A Goldilocks-style hiring report.
Job growth was solid — not too hot, not too cold. And more Americans began looking for work, which could ease worker shortages over time and defuse some of the inflationary pressures that the Fed has made its No. 1 mission.
Employers added 315,000 jobs, roughly what economists had expected, down from an average 487,000 a month over the past year. The unemployment rate reached 3.7%, its highest level since February. But it rose for a healthy reason: Hundreds of thousands of people returned to the job market, and some didn’t find work right away, which boosted the government’s count of unemployed people.
Businesses remain desperate to find workers. They’ve posted more than 11 million job openings, meaning there are nearly two job vacancies, on average, for every unemployed American.
Friday’s report “answers the persistent recession question, at least for today: We are not in a recession,’’ said AnnElizabeth Konkel, senior economist at the Indeed Hiring Lab.
Here are five takeaways from the August jobs report:
Making the Fed’s task easier
Friday’s report suggests that the Fed may find it a little easier to bring the economy in for a soft landing. Key to that daunting task is seeing hiring ease a bit. Fed Chair Jerome Powell has made it clear that the central bank expects to impose further large rate hikes to try to tame inflation.
“If the Fed were to design the [jobs] report, this is the kind of report they would have designed,’’ said Megan Greene, chief economist at the Kroll Institute.
Huh? Higher unemployment is good news?
Normally, an uptick in joblessness would be sobering news, even cause for worry. Not now.
The unemployment rate rose last month to 3.7% from 3.5%, which had tied a 50-year low. But the increase in August was welcome: The number of Americans either working or looking for work surged by 786,000 in August, the biggest one-month jump since January. And their share of the population — the so-called labor force participation rate — rose to 62.4% last month, its highest level since March.
“The labor participation rate went up, and I would love to see that number continue to climb even if that means a 3.7%, 3.8%, 3.9% unemployment rate,’’ said Labor Secretary Marty Walsh.
Broad job gains
Last month’s jobs gains were spread broadly across industries. Retailers added 44,000. Health care gained 48,000, including nearly 15,000 at hospitals. Factories added 22,000 jobs despite a slowing global economy. But hiring in leisure and hospitality slowed sharply in August.
Fewer hours
The average workweek slipped slightly last month to 34.5 hours. Those figures haven’t changed much this year even as employers have complained about a worker shortage.
Black unemployment
The Black jobless rate rose from 6% in July to 6.4% in August, the highest level since February.
It isn’t entirely clear what caused the uptick in Black unemployment, the second straight increase. The number of Black Americans in the labor force — and their participation rate — has now dropped for three straight months.