US jobs Data – Unemployment rises to 3.8% | US Jobs Data August 2023 | Payrolls rise by 1.87 lakh
What is US Jobs Data ?
What is US Jobs Data ?
The U.S. Bureau of Labor Statistics (BLS) issues the Employment Situation Summary, commonly referred to as the employment report or jobs report, every first Friday of the month. This report is derived from surveys conducted among households and employers and provides estimations for various key economic indicators in the United States.
These include the total number of individuals employed in the workforce, the average weekly working hours, and the average hourly wages. Additionally, it presents multiple variations of the unemployment rate.
Table of Contents
Summary
- In August, there was rise of 187,000 in nonfarm payrolls.
- The unemployment rate climbed to 3.8% in August, compared to July’s 3.5%.
- Average hourly earnings showed a 0.2% increase, contributing to a 4.3% year-on-year growth
As per official records and statement the unemployment rate has jumped to 3.8 % in August, however US job growth has picked up in the same month. The labor market conditions were easing and were as per expectoration of Federal Reserve and later hinted that they might not raise interests this month.
The employment report from Labor department on Friday showed that 736,000 people entered the job market last month which help to boost the participation rate to highest level from past 3.5 years. As per reports, potential about economical slowdown are luring people back into the labor market.
US Economy have generated 110,000 fewer jobs as compared to previously reported in June and July employment report. As per some economists, an increase in business closures in this period which was not witnessed in previous periods have caused this spike in US Jobs report.
Job openings data have also seen a drop in volume as compared to past 2 / 2 and a half years in July. This has helped to spark unemployment data.
US Central bank has exponentially hiked interest rate to cut down on money supply in open market, which has adversely affected business which have in-turn hammered a strike in US Jobs market
Christopher Rupkey, chief economist at FWDBONDS in New York said “This is probably the final nail in the coffin for the chances of another rate hike by the Fed in September,”
Nonfarm payrolls witnessed a witnessed a rise by 187,000 jobs last month after rising by 157,000 in July. Job growth averaged around 150,000 Jobs per month over the last 3 months. These numbers are sharply down from 238,000 Jobs from the previous periods.
As per payroll forecast by economists at Reuters estimated that jobs market would see a rise by 170,000 jobs. Economists are highly confident that payroll will be well above 100,000 jobs mark per month, which is required to keep up with increase in working age population of the country. The labor market displayed strength as the share of industries are experiencing job growth which reached its highest poinxx
Strike in Hollywood
As we know that, Hollywood actors have been on strike and this have resulted in decrease in 17,000 jobs from Motion pictures and Sound recording industry last month. A tucking firm named Yellow have announced bankruptcy in early August which led to job loss of 37,000 Jobs in the truck transportation industry in the nation. If such rare cases were not the case, we would have witnesses an increase in Job market data by 241,000 in August 2023.
Rick Rieder, chief investment officer of global fixed income at BlackRock have released a statement regarding Job market “This is still not the picture of the labor market we would expect to see if the economy were in danger of decelerating dramatically in the short term, although without question there are signs of moderation,”
WAGE GROWTH SLOWS
Last month, wage growth was moderate in nature, Average horly earning climbed by 0.20%, the smallest since February 2022 after gaining around 0.40% in July. Over the past 12 months leading up to August, wages saw a 4.3% increase, slightly down from the 4.4% rise observed in July
Wages are still witnessing faster growth than the 3.50% growth that the economists say is consistent with FED’s 2% target estimation. As we see fewer people switching their jobs in search of better opportunity, we can continue to see the same lower trend in upcoming periods.
Since March 2022, US FED have contained Interest rate hikes by 525 Basis points to currently present of 5.25%-5.50% range. Financial institutions are predicting that central bank is now done with rate hikes and may start cutting interest rates soon, which may start from upcoming year.
The hourly work week has also seen increase to 34.40 Hours / Week from 34.30 hours/week seen in July 2023. That contributed to an increase in aggregate wage income, which should support consumer spending and the overall economy.
Though we have seen household employment increase by 220,000 in August, it is insufficient to absorb the 736,000 people who are in search of new employment opportunity.
This has pushed unemployment rate to 3.80%, the highest since February 2022 from 3.50% in July. The unemployment rate continues to stay beneath the Federal Reserve’s most recent median projection of 4.1% by the fourth quarter of this year. The increase in the unemployment rate was primarily seen among young adults.
Stephen Juneau, a U.S economist at Bank of America Securities in New York said in his official statement “The increase among women 55 years and older is promising if it continues, as it could signal the end of the early retirement trend,”
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