STREAMING NOW: Watch Now

More Americans enter the workforce as unemployment stays at 3.7%

Average hourly pay increasing faster than inflation.

Posted: Sep 6, 2019 1:49 PM

WASHINGTON (AP) — U.S. employers added a modest 130,000 jobs in August, a sign that hiring has slowed but remains durable in the face of global economic weakness and President Donald Trump's trade war with China.

The unemployment rate remained 3.7% for a third straight month, the Labor Department said Friday , near the lowest level in five decades. And more Americans entered the workforce in August, a positive development that increased the proportion of adults who are either working or seeking work to its highest level since February.

August's job gain was boosted by the temporary hiring of 25,000 government workers for the 2020 Census. Excluding all government hiring, the economy added just 96,000 jobs in August, the fewest since May.

Yet the monthly jobs report provided some positive signals: Average hourly pay, for example, rose 11 cents in August to $28.11, up 3.2% from a year earlier. That is easily ahead of inflation and increases Americans' spending power.

The slower pace of hiring does suggest that Trump's trade war with China might be discouraging some companies from hiring. Still, even with more moderate job growth, rising employment and paychecks are expected to continue to fuel consumer spending, the primary driver of growth. The economy's expansion has entered its 11th year, the longest on record.

And for now, Americans are still spending. Consumer spending rose in the April-June quarter by the most in five years. It had also increased at a healthy clip in July.

That is especially significant now because many businesses have cut their spending and delayed expansion and investment given their uncertainty about the duration and impact of the trade war. In addition, retaliatory tariffs from China have cut into U.S. exports.

"With slower, but still-solid job gains and good wage growth, households will continue to spend," Gus Faucher, chief economist at PNC, said. "The U.S. economy should avoid recession."

Over the past six months, employers have added an average of 150,000 jobs, down from an average of 223,000 last year. In its report Friday, the government revised down its estimate of job growth for June and July by a combined 20,000. Downward revisions can be a cautionary sign that hiring will keep slowing. For now, though, job gains at the current six-month pace are enough to lower the unemployment rate over time.

One reason hiring is slipping is that with the unemployment rate so low, companies are having a harder time finding qualified workers. The solid wage gain in August suggests that more businesses are deciding that they need to offer higher pay to attract and keep employees.

"That's a sign we're in pretty good shape here," said Drew Matus, an economist at Metlife Investment Management.

A report by the Federal Reserve this week based on interviews with business executives found that companies and staffing firms think a lack of available workers is restraining growth.

Mike Bitar, managing director of the recruiting firm Protis Global, said the businesses he works with — mostly beverage companies, consumer goods makers and restaurants — are still pushing to hire more people.

"We have not seen any slowdown at all," he said.

Bitar tells clients that if they want to hire managers who don't require any training, they'll have to pay more — up to 10% to 15% higher than the typical salary for that position, given the tight labor market. If they're willing to train new managers, he said, they can avoid paying the premium.

In Friday's jobs report for August, the unemployment rate for African-Americans fell to 5.5%, a record low. Trump has repeatedly highlighted that decline, which has been steady since the Great Recession ended in 2009. In August, however, the rate fell because more African-Americans stopped looking for work and were no longer counted as unemployed.

Another positive sign was an increase in the proportion of Americans age 25 through 54 with jobs. Economists typically focus on that age bracket because it filters out students and older Americans nearing retirement. Eighty percent of them now have jobs, the highest level since January 2008, just after the Great Recession began.

Mark Fleming, chief economist at First American Financial, said the increase suggests that millennials in their late twenties are stepping up their job searches.

"We're finally beginning to see the heart of the millennial generation finishing their education and getting jobs," Fleming said.

Consumers generally feel confident about the economy despite some cautionary signs, according to a survey by the Conference Board. But an index of sentiment compiled by the University of Michigan fell in August by the most in nearly seven years. In that survey, Americans expressed rising concern about the consequences of tariffs.

U.S. and Chinese officials plan to meet in early October in negotiations that are intended to resolve their dispute. In the meantime, the impact of the trade war is evident in industry-specific hiring figures. Manufacturers added just 3,000 jobs in August, the latest sign that their hiring has tumbled since last year.

Employment in shipping and warehousing companies was essentially unchanged last month, with fewer factory and farm goods to transport. Retailers cut 11,000 jobs, the seventh straight month of decline, is partly a reflection of the impact of online shopping.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 95659

Reported Deaths: 2056
CountyConfirmedDeaths
Hennepin26960930
Ramsey10911320
Dakota7524126
Anoka6092133
Stearns401024
Washington379955
Scott257433
Olmsted244628
Nobles197116
Blue Earth16996
Wright16327
St. Louis160241
Carver14197
Clay138940
Rice13358
Mower13285
Sherburne115014
Kandiyohi10112
Winona88718
Lyon6954
Waseca6698
Benton5523
Steele5472
Freeborn5424
Nicollet54016
Watonwan5284
Crow Wing51618
Todd4952
Chisago4941
McLeod4882
Le Sueur4674
Otter Tail4414
Beltrami4215
Martin40810
Goodhue3659
Itasca32814
Pine3280
Douglas3102
Polk3054
Isanti2971
Becker2802
Carlton2701
Morrison2492
Dodge2390
Cottonwood2250
Pipestone22510
Chippewa2141
Meeker2022
Wabasha1960
Sibley1923
Brown1912
Yellow Medicine1822
Cass1804
Rock1730
Unassigned17052
Redwood1673
Mille Lacs1643
Murray1642
Renville1518
Jackson1481
Faribault1450
Swift1381
Houston1280
Kanabec1258
Roseau1230
Koochiching1223
Fillmore1200
Pennington1191
Lincoln1110
Hubbard1031
Stevens1031
Pope940
Big Stone820
Aitkin801
Wadena690
Wilkin653
Grant614
Lake590
Lac qui Parle581
Norman540
Marshall521
Mahnomen481
Red Lake451
Traverse310
Clearwater270
Lake of the Woods221
Kittson120
Cook60

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 85533

Reported Deaths: 1305
CountyConfirmedDeaths
Polk15872262
Woodbury544764
Johnson512627
Black Hawk448990
Linn4010111
Story344417
Dubuque325741
Scott301128
Dallas278538
Pottawattamie211338
Buena Vista199112
Marshall178434
Sioux16183
Wapello133357
Webster125514
Plymouth114121
Clinton112121
Muscatine110855
Crawford10885
Cerro Gordo105721
Warren9566
Jasper83832
Des Moines7848
Marion7637
Henry7434
Tama71331
Carroll6625
Lee6377
Wright5811
Dickinson5276
Boone5078
Bremer4927
Washington45911
Louisa42915
Mahaska41219
Delaware4023
Floyd3493
Jackson3493
Franklin34818
Winneshiek3356
Clay3264
Lyon3264
Hamilton3223
Benton3101
Winnebago30313
Hardin2991
Poweshiek2958
Buchanan2791
Jones2743
Butler2702
Kossuth2700
Shelby2671
Clarke2653
Emmet26510
Allamakee2616
Clayton2523
Chickasaw2500
Sac2500
Cherokee2492
Cedar2461
Guthrie2456
Fayette2222
Harrison2223
Grundy2203
Madison2192
Iowa2091
Palo Alto2020
Humboldt1903
Mitchell1900
Howard1886
Hancock1842
Calhoun1833
Mills1801
Page1700
Cass1682
Osceola1610
Monroe15911
Pocahontas1592
Lucas1566
Monona1531
Jefferson1381
Appanoose1363
Union1353
Taylor1301
Davis1244
Ida1221
Fremont1180
Van Buren1141
Keokuk1091
Worth1080
Greene1010
Montgomery965
Wayne862
Audubon821
Adair721
Decatur670
Ringgold502
Adams330
Unassigned170
Rochester
Overcast
61° wxIcon
Hi: 65° Lo: 45°
Feels Like: 61°
Mason City
Clear
65° wxIcon
Hi: 66° Lo: 47°
Feels Like: 65°
Albert Lea
Scattered Clouds
63° wxIcon
Hi: 64° Lo: 46°
Feels Like: 63°
Austin
Overcast
64° wxIcon
Hi: 65° Lo: 46°
Feels Like: 64°
Charles City
Clear
63° wxIcon
Hi: 65° Lo: 47°
Feels Like: 63°
Much Cooler Week Ahead
KIMT Radar
KIMT Eye in the sky

Community Events