Job growth slowed in August as the economy added 156K new jobs, less than July’s 189K increase and far below the 180K consensus forecast. Revisions showed 41K fewer jobs were created in June and July than previously reported. The year-ago rate of job growth slipped to 1.4%, the lowest in six years.

Professional and business services led the way in August, putting 40K more people to work. Manufacturing had a very good month, creating 36K new positions, the most in four years, due in part to a rise in motor vehicle and parts manufacturing. Construction also had a solid month as 28K workers found new jobs, the most since February. Healthcare services had a very weak month, adding just 17K new jobs, far less than the 44K increase in July and the least in over four years. The weakness was primarily due to a slight decline in home healthcare services following a big spike in July. Leisure and hospitality services only put 4K more people to work, a huge drop from July’s 58K increase. It was the industry’s worst month in over five years and was due to a big slowdown in hiring at food services and drinking places following a huge jump in July. Retail trade had another weak month, creating only 800 new jobs.

On the downside, information services continued to struggle, cutting 8K more jobs, the eleventh straight monthly decline during which 75K jobs have been eliminated. Government also lost 9K jobs, almost all of which came at the state and local levels.  

​The 33K decline in job growth in August versus July was largely due to much less hiring in leisure and hospitality services and healthcare. These slowdowns came after big spikes in certain areas, suggesting the weakness in August was payback for those recent jumps. 

The unemployment rate rose from 4.3% to 4.4% as the household survey showed that the labor force increased by 77K while employment declined by 74K. Thus, not only did new entrants not find jobs, some people previously employed lost their jobs. This is certainly not a good sign for the labor market.  

Average hourly earnings rose just 0.1% and were up 2.5% from a year ago for the fifth straight month. With inflation cooling recently, real wage growth has rebounded slightly but remains fairly weak at just 0.8%.

​Today’s weak jobs report, combined with weak inflation, rising tensions with North Korea and the impacts of natural disasters, suggests the Fed will almost certainly not raise interest rates any time soon.  

​Job growth was strong again in July as the economy added 209K new jobs, a little less than June’s 231K increase but much higher than the 178K consensus forecast. Revisions were negligible. The year-ago rate of job growth slipped to 1.5%, the lowest since May 2011.

Leisure and hospitality services led the way in July, putting 62K more people to work, mostly in food services and drinking places. Education and healthcare services added 54K new positions, with 45K of them coming from healthcare. Professional and business services also had a strong month as 49K people found new jobs, 15K of which were in temporary help services. Manufacturing had a decent month as 16K more people were hired. Wholesale trade added 6K more people to staff. The construction industry had a fairly weak month as only 6K new jobs were created. In the last five months construction has only added 28K new jobs amid a slowdown in home building. Financial services also had a weak month, with only 6K new positions being filled. Information services added 4K new people to the payrolls, the second straight gain following eight months of losses totaling 62K jobs. This is good news as these are among the highest paid jobs in the economy. Government added just 4K new jobs following a surge in June. Following four months of losses, the retail industry has created 3K new jobs in the past two months; not much, but at least jobs are being created. Following eight straight months of gains, mining and logging employment was flat in July.  

​The only industry that lost jobs in July was utilities, and even that was a mild decline of just 900 positions. The fact that only one industry lost jobs in July goes to show how strong today’s report really is. 

The 22K decline in job growth in July versus June was largely due to much less hiring in government and fewer jobs being created in other services and healthcare.

Even though 349K people entered the labor force in July, the unemployment rate fell from 4.4% to 4.3% as 345K of them found jobs, a remarkable 99% success rate!  

Average hourly earnings rose 0.3% and were up 2.5% from a year ago for the fourth straight month. With inflation cooling recently, real wage growth has rebounded slightly but remains very weak at just 0.9%.

​Today’s report may give the hawks more incentive to push for another Fed rate hike soon. Even so, inflation remains well below the Fed’s target, so a rate hike is not necessary. 

Job growth roared higher in June as the economy added 222K new jobs, much better than May’s 152K increase and much higher than the 170K consensus forecast. Even better, revisions showed 33K more jobs were created in April and 14K more jobs were created in May than previously reported. The rate of job growth held at 1.6% year-over-year.

Healthcare led the way in June with a 59K increase in payrolls, double May’s increase. Leisure and hospitality services followed with a 36K increase after a fairly weak 25K increase in May. Professional and business services added just 35K new positions, one of the lowest readings in the past year, as administrative and waste services saw the weakest job growth since December following a big increase in May. Government was a big surprise as 35K people found new jobs in public service, coming almost exclusively at the local level. The construction industry had a decent month as 16K people found work following three very weak months amid slowing activity in the housing market. Following four straight monthly declines, retail trade finally saw an increase in payrolls in June as the industry added 8K new jobs. Mining and logging had another good month as 8K new jobs were created, the eighth straight increase. After losing 2K jobs in May, manufacturing could only muster a 1K job gain in June as the motor vehicle industry is in a bit of a rut.  

On the downside, information services lost 4K more jobs, the ninth straight monthly decline, which is bad news since these are some of the highest paying jobs in the economy. Motor vehicle and parts manufacturing lost 1K jobs as sales continue to dwindle.

​The 70K difference in job growth in June versus May was largely due to the big increase in local government jobs and the rebound in healthcare services employment.

Although the unemployment rate rose from 4.3% to 4.4%, it was because 361K people entered the labor force, but only 245K of them found work. Thus, the increase in the unemployment rate was for a good reason as people were more confident about finding jobs.  

Average hourly earnings rose 0.2% and were up 2.5% from a year ago, down a bit from the 2.9% pace back in December. With inflation cooling recently, real wage growth has rebounded slightly but remains very weak.

​Today’s report will give the hawks more incentive to push for another Fed rate hike soon. Even so, inflation remains well below the Fed’s target, so a rate hike is not necessary.  

​Job growth slowed in May as the economy generated just 138K new jobs, down from the 174K increase in April, and much less than the 185K consensus forecast. Even worse, revisions showed 29K fewer jobs were created in March and 37K fewer jobs were created in April than previously reported. Still, the rate of job growth inched up to 1.6% year-over-year, but this was due to a very weak May a year ago, making year-ago comparisons more favorable.

Professional and business services led the way in May with a 38K increase in payrolls, equal to April’s growth. Healthcare added 32K new jobs, but this was far less than the 45K added in April. Leisure and hospitality services put 31K people back to work, but this was also far less than April’s reading. Temporary help services increased staff by 13K. Following a couple weak months, construction employment rebounded by 11K, but even that was still much weaker than the first couple months of the year, in line with the recent slowing in home building and sales. Financial services added 11K new jobs and mining put 6K more people to work, the seventh straight positive month.

On the downside, government saw the biggest decline as a net 9K people lost their jobs, with the losses coming at the state and local levels. Retail trade lost another 6K positions, bringing total losses to 80K over the last four months as the industry continues to struggle with competition from online retailers. Manufacturing lost 1K jobs as the motor vehicle industry slump continues. Information services employment cut another 2K jobs, the eighth straight decline as the sector’s worst slump since the recession continues.

​The 36K difference in job growth in May versus April was largely due to much less hiring in leisure and hospitality services, healthcare, manufacturing and government.

Although the unemployment rate fell from 4.4% to 4.3%, it was because 429K people left the labor force, 234K of which were previously employed and 195K of which were  previously unemployed. Thus, the decline in the unemployment rate was for the wrong reasons.  

Average hourly earnings rose 0.2% and were up 2.5% from a year ago, down a bit from the 2.9% pace back in December. With inflation cooling recently, real wage growth has rebounded slightly but remains very weak.

​Today’s report, along with weak housing data, a slowing vehicle market and softening inflation, gives more credence to a call for no Fed rate hike in June.  

​Job growth rebounded in April as the economy generated 211K new jobs, up significantly from the 79K increase in February, and much better than the 185K consensus forecast. Revisions showed 13K more jobs were created in February and 19K fewer in March than previously reported. The rate of job growth inched up to 1.6% year-over-year.

Leading the way in April was a strong 55K increase in leisure and hospitality services, half of which came from food services and drinking places. However, this came after a very weak March for the sector. Professional and business services were next, adding 39K new jobs. Healthcare services saw a 37K increase in staff, though again this followed the weakest month since December 2013. Financial activities had a decent month, adding 19K new jobs after dismal readings in February and March. Following a scant 2K rise in March, government payrolls rose by 17K, driven exclusively by local government. Mining and logging had another good month, putting 10K more people to work, bringing the running six month total increase to 45K. This is very good news as these are high paying jobs. Importantly, retail trade added 6K jobs, the first increase in three months after losing 56K jobs during February and March.  

The only real downside in the report  was a 7K decline in information services employment, the seventh straight decline and the sector’s worst slump since the recession.

The 132K difference in job growth in April versus March was largely due to strong hiring in leisure and hospitality services and sharp rebounds in retail trade and healthcare.

More good news was a decline in the unemployment rate from 4.5% to 4.4% as the 156K gain in household employment far outpaced the small 12K increase in the labor force, meaning the increase in the labor force was fully absorbed, while 144K people who were already in the labor force, but were not previously working, also found new jobs.

Average hourly earnings rose 0.3% and were up 2.5% from a year ago, down a bit from the 2.9% pace back in December. With inflation moving up recently, real wage growth has cratered and was virtually flat in March.

​Very weak GDP growth in the first quarter and slowing job growth and inflation in March led the Fed to hold rates steady on Wednesday. Even so, the Fed believes the recent weakness will likely not last. Today’s job report has bumped up the odds of a rate hike in June, but, as always, inflation will be key. 

​Job growth was very weak in March as the economy generated just 98K new jobs, down significantly from the 219K increase in February, and far below the 175K consensus forecast. In addition, revisions showed 38K fewer jobs were created in January and February. The rate of job growth slipped to 1.5% year-over-year, the slowest in four years.

In this very weak report, only professional and business services saw any real strength, adding 56K new positions, driven largely by administrative and support services. Healthcare was a very distant second, creating just 17K new jobs, the fewest in three years. Manufacturing put 11K more people to work, which is a decent month for the industry but less than half the jobs created in February. Mining and logging did have a very good month as 11K more people found employment.

​On the downside, by far the biggest disappointment in today’s report is another massive 30K decline in retail trade employment following a 31K plunge in February, which was the biggest drop since December 2009. Many big box retailers are trimming staff in the wake of greater competition from online sales. Although construction added 6K jobs, it was a far cry from the strength seen during the last several months. This, along with much slower job growth in healthcare and a loss in education jobs following a big gain in February, are the main reasons for the big miss in today’s report.

​Despite the widespread weakness in hiring in March, the unemployment rate fell to 4.5% from 4.7% as household employment jumped by 472K while only 145K people entered the labor force, meaning the increase in the labor force was fully absorbed, while 326K people who were already in the labor force, but were not working, also found jobs. Job growth as reported in the household survey has been much stronger than that in the establishment survey the last two months, suggesting more job growth has been coming from smaller businesses and self-employment. 

Average hourly earnings rose 0.2% and were up 2.7% from a year ago, a slight decrease from the 2.8% pace in February. However, with inflation moving up recently, real wage growth has cratered and was flat in February.

​The stock market reaction to today’s report was muted, partly because weak hiring was offset by a lower unemployment rate, and partly because investors were weighing the consequences of the airstrikes in Syria. Markets will likely be on edge in the coming weeks. 

​Job growth was strong again in February as the economy generated 235K new jobs, down slightly from the 238K increase in January, but far above the 200K consensus forecast. The rate of job growth held at 1.6% year-over-year for the fourth straight month.

Construction had a monster month, adding 58K new jobs, the most in ten years, most likely due to warmer than normal weather. Professional and business services followed with 37K new positions. Healthcare services had another good month, putting 33K more people to work. Following a loss of 5K jobs in January, education services bounced back with a 29K increase in February. Manufacturing also had a very good month as 28K workers were added to the payrolls, the most in over five years. This was likely the result of expectations for more business friendly policies under President Donald Trump, as well as some deals already made. Mining and logging added 9K jobs as well, the fourth straight monthly increase, which is good news since these jobs are on the higher end of the pay scale. Transportation and warehousing had a nice turnaround, adding 9K jobs after cutting 10K positions in January. Financial services had a weak month, adding just 7K new jobs after adding 32K jobs the month before.

On the downside, by far the biggest disappointment in today’s report is the massive 26K decline in retail trade employment, the biggest drop since December 2012, as many big box retailers are trimming staff in the wake of greater competition from online sales.

​The unemployment rate ticked down to 4.7% from 4.8% as household employment jumped by 447K while only 340K people entered the labor force, meaning the increase in the labor force was fully absorbed, while 107K people who were already in the labor force, but were not working, also found jobs.

Average hourly earnings rose 0.2% and were up 2.8% from a year ago, a slight increase from the 2.6% pace in January. However, with inflation moving up recently, real wage growth has cratered and was completely flat in January.

​The stock market rose mildly early after today’s report as rising employment and wages portend stronger consumer spending, but also higher labor costs. The Fed is expected to raise the Fed Funds rate by a quarter point next week as inflation continues to accelerate. Higher rates could put a dent in the housing and vehicle markets, which may offset any lift from more business-friendly economic policies. 

The U.S. economy added 175K jobs in May, better than the 149K added in April, which was revised downward from 165K, and better than the 159K consensus expectation. Total downward revisions for March and April showed 12K fewer jobs than previously thought. Still, the rate of job growth ticked up to 1.6% year-over-year from 1.5% in April (chart 1 below). Even so, the trend of job growth has slowed, and we are still 2.4 million jobs short of the January 2008 peak (chart 2). The unemployment rate ticked up to 7.6% as labor force expansion outpaced household job growth (chart 3).

Professional and business services led the way, creating 57K jobs on the month. However, half of those jobs came from temporary help services. Again, this is good news because a rise in temp jobs generally precedes a rise in permanent jobs. On the flip side, continued reliance on temp services suggests companies are not totally convinced of the sustainability and strength of the recovery to add to full-time staff. Part of the hesitance in hiring is coming from uncertainty surrounding the healthcare overhaul, which is making it difficult for firms to plan their budgets and benefits coverage. Leisure and hospitality services also saw a pickup in job growth to 43K in May from 39K in April as stronger job growth and rising confidence loosened up the purse strings on leisure spending. Retail trade saw a nice bump of 27K jobs, better than the 19K seen in April. Meanwhile, the education and healthcare sector saw weaker job growth than in April as healthcare and social assistance jobs rose at only a third of the previous month's pace. Construction job growth rebounded, adding 7K jobs, following a loss of 2K jobs in April, driven primarily by further increases in residential specialty trade contractors amid continued healing in the housing market.

The slowdown in manufacturing was evident in the payroll report as both manufacturing and transportation & warehousing lost jobs in May. The manufacturing sector is reeling from ongoing weakness in Europe and a slowdown in China. Government payrolls also fell during the month, shedding 3K jobs after falling by 8K jobs in April, as government budget cuts continue to weigh on public employment.

The unemployment rate rose for the first time since October. While the increase in the unemployment rate may seem like bad news, it is actually good news since it was driven primarily by job seekers returning to the labor force in the hopes of finding work, suggesting workers are feeling more optimistic about their prospects. The workweek held steady at 34.5 hours, while average hourly earnings growth held at 2.0% year-over-year. This is a much weaker pace than prior to the recession, which is helping to keep inflation contained.

Today's report was about as good as it gets for the stock market. Job growth was decent, but not strong enough to think the Fed might pull back on quantitative easing. Investors are finding themselves in a goldilocks scenario right now, as seemingly nothing is deterring market enthusiasm. Oddly enough, about the only thing that has had any downward influence on the market recently has been good economic news! I expand upon this in my previous blog post, where I suggest that it is imperative to understand what is going on behind the scenes that is causing the stock market to remain so strong despite a continually weak economy. The party can't last forever, and it won't. There is no phrase worth remembering more than this one: There is no free lunch. Sooner or later, the Fed's free money scheme will end, and the reality of a weak domestic and global economy, along with the huge risk being piled up on the Fed's balance sheet, will set in, and the market will get a rude awakening.

The U.S. economy added 165K jobs in April, better than the 140K expected. In addition, the Bureau of Labor Statistics revised the February gain upward from 268K to 332K, and the March gain upward from 88K to 138K, for a total upward revision of 114K. In April, the unemployment rate slid from 7.6% to 7.5% as the household survey showed a gain of 293K jobs, while the labor force grew by 210K. Average hourly earnings rose 0.2% on the month and were up 1.9% on a year-ago basis, barely above the 1.5% inflation rate in March. Average weekly hours worked fell to 34.4 from 34.6.

Professional and business services led the way in job creation, adding 73K jobs in April. However, temporary help services comprised nearly half of that amount, adding 30K jobs. This could be a good sign that employers are finding more demand for labor, and a rise in temporary help usually portends a rise in full time employment down the road. However, it  could also be the result of many employers using temporary workers instead of full time workers either to save on healthcare costs or because they are not sure how healthcare reform will affect their business. Leisure and hospitality services added 43K jobs in April following a 38K rise in March.  Retail services saw a nice rebound, adding 29K jobs following a 4K dip in March, which was likely driven by unusually harsh winter weather and the effects of the payroll tax hike.

On the downside, construction employment fell 6K as the industry took a breather from strong growth the prior two months that was fueled by the resurgence in the housing market. The harsh winter weather may have played a role here as well. Information services fell by 9K, while government payrolls declined by 11K. Government payroll declines were driven primarily by federal cuts as the Postal Service continued to pare staff.

Today's report was welcome news after a weaker than expected first quarter GDP report and slowdown in manufacturing. The economy has now regained about 70% of the jobs lost during the recession (chart 1). Still, employment growth has slowed a bit over the past year and is slightly below the pace seen prior to the recession (chart 2). This is certainly not what the Fed had hoped for after injecting trillions of dollars into the fixed income market in an effort to lift the economy. Although the unemployment rate has come down steadily (chart 3), it is still very high considering interest rates are at record lows and corporate profits are at record highs.

In order for the economy to gain more momentum, banks will need to increase lending, especially to small businesses, which are still finding access to credit difficult. Uncertainty also needs to be cleared up on taxes, spending and healthcare reform. Until business leaders are more clear about the way forward on fiscal policy and healthcare, it is going to be difficult for them to significantly increase payrolls and get the economy on a more sustainable footing. Until then, the Fed will continue to stimulate the economy while big corporations will favor share buybacks, acquisitions and productivity enhancements rather than adding to staff. Longer term, the economy is in for a difficult adjustment period once Obamacare kicks in next year. Thus, be prepared for further economic weakness and more volatility in the financial markets.