September 9, 2019 — August Job Numbers Fall Short, but Wages Are Up

SEPTEMBER 9, 2019 – AUGUST JOB NUMBERS FALL SHORT, BUT WAGES ARE UP

The US economy adds 130,00 new jobs in August, fewer than expected than the expected 150,000.  The unemployment rate remained steady at 3.7 percent, while wages rose 0.4 percent for the month.

 Despite the weak gains, the numbers do not signal a recession. The labor force participation rate increased to 63.2 percent, which ties its highest level since August 2013.  The total number of people, who are considered to be employed, rose by 590,000 to a record 157.9 million.  Solid wage growth in August has brought up hourly earnings by 3.2 percent over the year.

However, we cannot write off the data as a non-event.  June and July job numbers were revised lower, with the average monthly job growth in 2019 slowing to 158,000 compared to 223,000 per month a year ago. The decline comes with the ongoing concerns of the protracted trade battle with China, causing agricultural and manufacturing jobs to fall off.

The Fed is, overwhelmingly, expected to cut the interest rate later this month. The market estimates, with 90 percent probability, a cut of 25 bps, 10 percent of those surveyed expect a cut of 50 bps. 

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