There was job growth in August, but it was woefully weaker than the job growth seen in July. The question is, will the Fed be willing to see through the disappointment as a short-term effect of the Delta variant? That effect was evident in the leisure and hospitality industry, which showed no change in nonfarm payrolls in August after an increase of 415,000 positions in July.
In a certain respect, this report painted a picture of labor market stagflation. That is, there wasn't much job growth but there was ample wage growth. Average hourly earnings jumped 0.6% month-over-month, driving up the year-over-year increase to 4.3% from 4.1% in July.
The key takeaway from the August report, frankly, is that it was a real mess from a policy-making standpoint. That is going to fuel continued uncertainty for market participants on the matter of the Fed's course of action. That doesn't relate to what the Fed will do with a tapering decision, but rather when the Fed will make it.
August nonfarm payrolls increased by 235,000 ( consensus 750,000). The 3-month average for total nonfarm payrolls decreased to 750,000 from 876,000 in July. July nonfarm payrolls revised to 1,053,000 from 943,000 June nonfarm payrolls revised to 962,000 from 938,000.
August private sector payrolls increased by 243,000 ( consensus 650,000). July private sector payrolls revised to 798,000 from 703,000. June private sector payrolls revised to 808,000 from 769,000.
August unemployment rate was 5.2% (Briefing.com consensus 5.2%), versus 5.4% in July. Persons unemployed for 27 weeks or more accounted for 37.4% of the unemployed versus 39.3% in July. The U6 unemployment rate, which accounts for unemployed and underemployed workers, was 8.8%, versus 9.2% in July.
August average hourly earnings increased 0.6% ( consensus 0.3%) versus a 0.4% increase in July. Over the last 12 months, average hourly earnings have risen 4.3%, versus 4.1% for the 12 months ending in July.
The average workweek in August was 34.7 hours (consensus 34.
, versus a downwardly revised 34.7 hours (from 34.
in July. Manufacturing workweek decreased 0.2 hours to 40.3 hours. Factory overtime was unchanged at 3.2 hours.
The labor force participation rate was 61.7%, versus 61.7% in July.
The employment-population ratio increased to 58.5% from 58.4% in July.