August job growth fell slightly short of expectations, coming in at 315,000. After last month's job growth (revised down to 526,000) far exceeding expectations, this month's slower growth can be seen as a good sign for those watching the Fed's moves to stem inflation. While hiring might have slowed, job openings rose to 11.2 million in July. With unemployment rising to 6 million, there are still 1.86 jobs available for every person unemployed.
July's Job Opening and Turnover Survey
At the end of July, job openings rose to 11.3 million, and hires came in at 6.4 million. The quit rate is little changed at 4.2 million, and layoffs and discharges are little changed at 1.4 million. The high number of job openings has created an employee market, rising wages, and increasing inflation.
Several sectors saw an increase in job openings. The Transportation, Warehousing, and Utilities sector had an 81,000 increase in job openings. The Arts, Entertainment, and Recreation sector rose by 53,000. The Federal Government (+ 47,000) and State and Local Government Education (+42,000) also increased.
The Transportation, Warehousing, and Utilities Sector saw an increase in both separations (+65,000) and quits (+39,000). In contrast, quits decreased in Health Care and Social Assistance and State and Local Government Education.
August Jobs Report
Non-farm payroll grew by 315,000 in August, coming in below estimates. Unemployment rose to 3.7% as the labor force participation rate increased to 62.4%. August saw a rise in the number of permanent job losers to 1.4 million, but long-term unemployment saw little change at 1.1 million.
The labor force participation rate increased to 62.4%, but it is still 1% below its pre-pandemic levels. The employment to population ratio is little changed at 60.1% and is still below its pre-pandemic levels.
The sectors that saw the biggest job growth were, Professional and Business (+68,000), Health Care (+48,000), and Retail Trade (+44,000). While there was an increase in the number of job openings in the Transportation sector, as far as hiring the Transportation sector saw little change in August.
The number of people teleworking dropped to 6.5% in August. The average pay rose by 10 cents. While this pay increase did fall slightly below estimates, the number of open positions still leads to high competition, which has kept pay increasing.
The decrease we see this month in payroll increases versus July may signal that the Fed's policies are starting to make an impact. However, the high number of job openings means that competition for employees is still high, causing increases in pay and resulting in one of the major factors of inflation.
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Debra Watkins covers recruitment and digital marketing for Lionzone. A Nashville native, after graduating from the University of Kentucky, Debra utilized her research and writing skills in the museum and heritage tourism fields, rising to director of two institutions before returning to Nashville in 2020 to join Lionzone.