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Economy in Brief

U.S. Payrolls Post Disappointing Increase; Jobless Rate Ticks Lower
by Tom Moeller  September 5, 2014

Nonfarm payrolls gained 142,000 (1.8% y/y) during August following increases of 212,000 and 267,000 during the prior two months. The rise was the weakest since December and disappointed expectations for a 220,000 increase in the Action Economics Forecast Survey. The unemployment rate matched expectations and dipped to 6.1%, its lowest level since September 2008. The overall unemployment rate, including marginally attached workers and those employed part-time for economic reasons, fell to 12.0%.

From the payroll employment survey, factory sector employment was flat (1.4% y/y). Retail trade jobs actually fell 8,400 (+1.6% y/y) while transportation & warehousing employment gained just 1,200 (3.4% y/y). Financial sector jobs rose 7,000 (0.8% y/y) but information sector employment declined 3,000 (-0.1% y/y) and education services fell 6,300 (+0.9% y/y). Continuing to show strength was employment in the professional & business services sector where jobs rose 47,000 (3.4% y/y) as temporary employment increased 13,000 (8.0% y/y). Health care & social assistance hiring improved 42,700 (1.9% y/y). Leisure & hospitality jobs increased 15,000 (2.4% y/y), but that was off sharply from the pace of recent years. Construction payrolls increased 20,000. Government sector jobs improved 8,000 (0.2% y/y) as local area employment rose 4,000 (0.4% y/y); federal government jobs improved 3,000 (-1.2% y/y) and state government jobs gained a minimal 1,000 (0.3% y/y).

The length of the average workweek held steady at 34.5 hours for the sixth straight month. That left aggregate hours worked up 0.1% m/m and 1.8% (AR) this quarter versus Q2.

Average hourly earnings posted a 0.2% increase (2.1% y/y) after a 0.1% July improvement. Private service sector earnings rose 0.3% (2.0% y/y) led by 0.4% gains in the financial sector (1.9% y/y) and the leisure & hospitality industries (3.1% y/y). Factory sector earnings rose a steady 0.2% (2.1% y/y).

The household employment survey indicated that the unemployment rate edged down to 6.1%. The decline occurred as employment improved 16,000 (1.5% y/y) but the labor force fell 64,000 (+0.3% y/y). With that decline, the labor force participation rate equaled its cycle low of 62.8%, its lowest level since early-1978. The number of individuals not in the labor force rose 1.9% y/y.

For men, the unemployment was at 6.2%. For women, the unemployment was at 6.1%. Unemployment amongst teenagers was 20.2%; for black teens, it was 34.9% and for whites it was 18.3%. For individuals over age 20, the jobless rate was 5.7%, 10.7% for adult blacks and 4.8% for whites.

The unemployment rate for individuals with less than a high school diploma was 9.1% while for high school graduates but no college it equaled 6.2%. For those with some college but no degree, the jobless rate was 5.4% and for college graduates and higher, it was 3.2%.

The figures referenced above are available in Haver's USECON database. Additional detail can be found in the LABOR and in the EMPL databases. The expectation figures are from Action Economics and are in the AS1REPNA database.

Employment: (M/M Chg., 000s) Aug Jul Jun Y/Y 2013 2012 2011
Payroll Employment 142 212 267 1.8% 1.7% 1.7% 1.2%
 Previous -- 209 298 -- -- -- --
 Manufacturing 0 28 21 1.4 0.7 1.7 1.7
 Construction 20 31 8 4.0 3.3 2.1 0.2
 Private Service Producing 112 146 226 2.1 2.2 2.2 1.9
 Government 8 -1 7 0.2 -0.3 -0.8 -1.8
Average Weekly Hours - Private Sector 34.5 34.5 34.5 34.5
(Aug'13)
34.5 34.4 34.3
Average Private Sector Hourly Earnings (%) 0.2 0.1 0.3 2.1 2.1 1.9 2.0
Unemployment Rate (%) 6.1 6.2 6.1 7.2
(Aug'13)
7.4 8.1 8.9
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