August Employment Report: Job growth slows, but the US economy is doing well

Employment growth further slowed in August, with 130,000 new jobs added to the US economy, compared with 159,000 created in July, according to the report. latest report on the Bureau of Labor Statistics jobs.

The slowdown suggests that the severe shortage of labor is holding back economic growth. And while the overall drop in job creation this year has fueled panic over a potential economic downturn, there is no evidence in the latest jobs report that a slowdown is imminent.

In fact, almost all data released on Friday suggest that the US economy is doing well.

The unemployment rate, for example, did not move in August to 3.7%. This is still the lowest unemployment rate in the United States since December 1969. More and more people joined the labor force in August and wages have risen again.

Yet none of this is of much importance to middle class and working class families: workers have only an average hourly wage increase of 11 cents in August, two cents more than the last two months. Job security is perhaps one of the few benefits that employees can count on.

Almost everyone who wants to work can find a job these days, and those who lose their jobs or decide to leave will have no trouble finding another job.

But millions of Americans work part-time while they prefer to have full-time concerts or at least work longer hours. The number of people in this group has generally decreased, but reached 4.4 million workers in August.

Firms providing business services – such as janitors and security guards – created the largest number of jobs last month, followed by the federal government, which filled the positions for the 2020 census. Health has also created thousands of jobs. Nurses, physiotherapists and home health aides are in high demand right now.

United States Department of Labor / Bureau of Labor Statistics

The average monthly growth in employment up to now in 2019 is about 158,000, down significantly from the 223,000 jobs created on average each month last year. The decrease is not alarming; he simply suggests the current shortage of manpower makes it difficult for employers to fill all vacancies. There are many more jobs available at the present time than people looking for work.

One thing to note is that these are just initial estimates – the numbers are usually revised in a few months. For example, the number of new jobs created in July increased from 164,000 to 159,000.

Companies accumulate profits

Even though Americans find jobs quite easily, they still do not see the so-called economic boom reflected in their portfolios.

August was another month with disappointing wage growth. With such a tight labor market and rising productivity, workers should expect wage increases well above what they are getting.

Private sector workers (excluding farm workers) benefited from an increase in their average hourly wage of 11 cents, which corresponds to an average hourly wage of $ 28.11. Over the last 12 months, average hourly earnings increased by 3.2%. This is a slight increase over previous months, but it still represents a disappointing wage growth, adjusted for inflation.

The latest wage data suggests that workers still do not benefit much from the longest economic expansion in US history. Sluggish revenue growth was the weakest part of the US economy in its recovery from the Great Recession. Wage growth has barely exceeded the cost of living is rising, even though the unemployment rate has dropped and the economy has developed. The increase in the average hourly wage of 11 cents in August seems to indicate the same thing.

Over the last year, the cost of food and housing has increased, forcing paychecks to stretch further. The annual inflation rate climbed up to 1.8 percent in July, although it is still well below the maximum of 2.9% in July 2018 (based on Consumer price index) since seven years. When adjusted for inflation, real wages of workers have only increased by about 1.4% in the past year. This should be repeated: during the longest economic expansion in the history of the United States, characterized by a record unemployment rate, workers earn only 1.4% more than that. a year ago, after adjusting for inflation.

As paychecks increase more than they did last year, the numbers are still pitiful when compared to exorbitant gains Business leaders get. For example, CEOs received average salary compensation of $ 500,000 in 2018, while the average American worker received an additional $ 1,000 – barely enough to exceed inflation.

Frustration over stagnant wages is also the main factor underlying the generalized strikes by workers across the country in places like California, Illinois and Missouri. In August, 20,000 AT & T workers went on strike in the South to force the company to negotiate better wages and benefits. After three days of strike, the company agreed to continue trading.

In April, 31,000 supermarket employees went on strike in the Northeast to cancel proposed wage cuts and higher insurance premiums. the Stop & Shop on strike was the biggest private sector work stoppage in years. After eight days in empty supermarkets, the company agreed to give up its plan.

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In response, voters in some states forced companies to pay a salary increase to lower-paid employees. In mid-term elections in November, voters in Missouri and Arkansas mass voting measures approved this will increase the minimum wage for nearly 1 million workers in both states. And as a result of the new laws, more than 5 million low-wage workers in 19 states obtained salary increases on January 1.

These laws have helped raise wages up to now in 2019, but not by much.