Labor Day Progress Report: A Shift Down to Cruising Speed for Job Market

Job creation in the United States slowed more than expected in August, a sign that the surprisingly resilient economy might be starting to ease under pressure from higher interest rates.

The unemployment rate, at 3.8 percent, ticked up by 0.3 percentage point, and the number of unemployed persons increased by 514,000 to 6.4 million adding further signs of a moderating jobs market.

Private employers added 177,000 jobs in August, well below the revised total of 371,000 added in July. Economists surveyed by Dow Jones were expecting 200,000 jobs added in August.

Pay growth also slowed for workers who changed jobs and those who stayed in their current positions.

“This month’s numbers are consistent with the pace of job creation before the pandemic,” Nela Richardson, chief economist at ADP, said in a press release. “After two years of exceptional gains tied to the recovery, we’re moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede.”

Here are our takeaways from it:

• The unemployment rate moved from 3.5% to 3.8%
• About 736,000 people joined the labor market last month
• The labor force participation rate rose to 62.8% in August, its highest level since reaching 63.3% in February 2020 (and we know what happened right after that!)
• All told, our economy has added 3.1 civilians back into the workforce in the last year.
• The Federal Reserve will likely view this "better balance" between the supply and demand of workers positively when they meet to discuss raising interest rates later this month.

In conclusion, job growth continued to slow, the unemployment rate rose, labor force participation increased, and earnings growth decelerated, all signs that the supply and demand for labor are coming into better balance.

Here is a take from MRINetwork :

“Over the past few years, talent managers have been endlessly discussing the impact of a changing work environment. Clients and candidates have focused on the new hybrid workplace, the impact of technology and the changing attitudes and behaviors of various demographic cohorts like Millennials and Gen Xers. Today’s BLS data might signal a pause in those debates and the beginning of a focus on the fundamentals that have traditionally driven the executive, technical, professional and managerial hiring workplace for decades.” - Nancy Halverson, Vice President of Operations for MRINetwork.

So what's YOUR personal economic outlook for the final third of 2023? Let us know!

To view the full Employment Situation report from the U.S. Bureau of Labor Statistics, click here.