Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  Nonfarm Payrolls Increased 315,000 in August
Posted Under: Data Watch • Employment • Government • Inflation • Fed Reserve • Interest Rates • Spending
Supporting Image for Blog Post

 

Implications:  A mediocre report on the labor market, which, given the circumstances, is exactly what the Federal Reserve wanted to see.  Nonfarm payrolls rose 315,000 in August, which narrowly beat consensus expectations.  However, downward revisions to June and July reduced the net gain to 208,000.  The best news in the report was that civilian employment, an alternative measure of jobs that includes small-business start-ups, rose 442,000 while the labor force increased 786,000.  As a result, the labor force participation rate rose to 62.4%, tying the high so far in the recovery.  Also as a result, the unemployment rate rose to 3.7% versus 3.5% in July.  But increases in the unemployment rate due to more jobs and faster growth in participation are not something to worry about.  Perhaps the best summary of the jobs report came from wages.  Average hourly earnings rose 0.3% in August.   That’s good news in that we estimate consumer prices were up about 0.1% in August, so that means “real” (inflation-adjusted) wage gains rose in August itself.  However, 0.3% per month isn’t enough to keep up with the inflation trend.  Average hourly earnings are up 5.2% from a year ago while consumer prices are likely up about 8.2%.  The worst news in today’s report was on hours.  Average weekly hours per worker declined to 34.5 in August from 34.6 in July, tying the lowest level in the last couple of years.  As a result, even though more people were working in August, the total number of hours worked declined by 0.1% for the month.  We like to follow total wages paid, which is based on average hourly pay and total hours worked.  Total wages increased 0.2% in August, which was the smallest gain in eighteen months.  No, the US economy isn’t in a recession.  But this doesn’t mean we won’t fall into one sometime in the next year or so.  Overly loose monetary policy has generated an inflation problem that’s worse than any we’ve had in four decades.  Eventually the Fed needs to get tight to bring down inflation and, with a lag, that tightness will cause a recession.               

Click here for a PDF version

Posted on Friday, September 2, 2022 @ 11:00 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2022 All rights reserved.