A Cruel Summer for the Labor Market
The jobless recovery rolls along as the labor market can't seem to shake off its recent torpor. The Labor Dept.'s August employment report, released Sept. 5, showed a decline of 93,000 in nonfarm payrolls on the month, while the unemployment rate fell to 6.1% from 6.2%.
Rounding out the headline figures, the workweek held at an all-time low of 33.6 hours, while hourly earnings rose a subdued 0.1%. Overall, the report was much weaker than expected, as payrolls and hourly earnings were below even recent modest trends, while leading indicators of hiring (such as hours worked and temporary employment) were also disappointing.
While the Bureau of Labor Statistics indicated that that the blackout that hit the Northeast and Midwest should not have had an effect, similar types of disruptions in the past have, in hindsight, appeared to have more of an effect than they should have. So we will wait for September data to pass judgment on this front.
As for payrolls, weakness was widespread outside of construction (which showed a gain of 19,000 jobs) and Education & Health (up 24,000). The bleeding continued in the manufacturing sector, which lost another 44,000 jobs. Business services lost 28,000, and government shed 26,000 jobs, as the budget deficit crunch facing most forms of government continued to damp new hiring.
Overall, the data suggest that despite the sharp upswing in economic activity over the last couple of months, there is still little indication of any pick-up in hiring.
From MMS International analysts