by Calculated Risk on 9/01/2023 09:12:00 AM
The headline jobs number in the August employment report was at expectations, however, employment for the previous two months was revised down by 110,000, combined. The participation rate increased, and the employment population ratio was unchanged, and the unemployment rate increased to 3.8%.
In August, the year-over-year employment change was 3.09 million jobs.
Prime (25 to 54 Years Old) Participation
Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.
The 25 to 54 participation rate increased in August to 83.5% from 83.4% in July, and the 25 to 54 employment population ratio was unchanged at 80.9% from 80.9% the previous month.
Average Hourly Wages
Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 4.3% YoY in August.
From the BLS report:
“The number of persons employed part time for economic reasons, at 4.2 million, changed little in
August. These individuals, who would have preferred full-time employment, were working part time
because their hours had been reduced or they were unable to find full-time jobs.“
The number of persons working part time for economic reasons increased in August to 4.22 million from 4.00 million in July. This is below pre-recession levels.
These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.1% from 6.7% in the previous month. This is down from the record high in April 22.9% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is close to the 7.0% level in February 2020 (pre-pandemic).
Unemployed over 26 Weeks
According to the BLS, there are 1.296 million workers who have been unemployed for more than 26 weeks and still want a job, down from 1.164 million the previous month.
This has been increasing recently and is above the pre-pandemic levels.
The headline monthly jobs number was at consensus expectations; however, June and July payrolls were revised down by 110,000 combined. The unemployment rate increased as more people joined the labor force.