Employers added jobs in August, but the unemployment rate went up
ARI SHAPIRO, HOST:
First, as we head into the Labor Day weekend, the Labor Department is out with a new jobs report. It shows that U.S. employers added 187,000 jobs last month. That's a slower pace of hiring than we saw earlier in the year. Meanwhile, the unemployment rate inched up to 3.8%. NPR's Scott Horsley is here with the details. Hey, Scott.
SCOTT HORSLEY, BYLINE: Hi, Ari.
SHAPIRO: How should we read that 187,000 figure? And explain why, if the economy is adding jobs, the employment rate went up.
HORSLEY: Yeah, hiring has definitely downshifted. Job gains for June and July were also revised lower. Employers are no longer racing to make up jobs that were lost in the pandemic. They're kind of back to a more normal hiring mode. At the same time, a whole lot of new workers came off the sidelines last month, and not all of them found jobs right away. So that's why you see the uptick in the unemployment rate. That surge of new workers is actually a pretty good sign. It generally means people are feeling good about job prospects. They're not so worried about COVID anymore. Of course, it could also be a sign that people have bills that they need to pay, so they're looking for work. But we have seen a gradual growth in the number of available workers for several months now and then a big increase in August. That's something President Biden celebrated at the White House Rose Garden today.
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PRESIDENT JOE BIDEN: More than 700,000 people joined the labor force last month, which means the highest share of working-age Americans are in the workforce now than at any time in the past 20 years.
HORSLEY: Even though unemployment ticked up just a bit, it's still under 4%. It's been under 4% for the last 19 months, which is the longest stretch like that since the late 1960s. And the unemployment rate for African Americans, which has been bouncing around in recent months, was down in August. It fell to 5.3%.
SHAPIRO: When you parse these numbers, which industries are adding jobs?
HORSLEY: The gains are pretty broad-based, actually. Health care added a lot of jobs last month. Hospitality continues to add workers. We also saw gains in construction, which has held up very well even though interest rates are on the rise. A lot of those new construction workers are not building houses. They're working on commercial buildings or big public works projects. We did see some job cuts last month. About 37,000 trucking jobs were lost after the big Yellow trucking company went out of business. And movie production lost about 17,000 jobs as a result of the ongoing actors and writers strikes. Most other industries are still hiring, though, although Nancy Vanden Houten of Oxford Economics says job growth has definitely slowed down.
NANCY VANDEN HOUTEN: From the Fed's perspective, that's what they want to see - kind of a period of below-trend growth in employment which they view as necessary to bringing inflation down.
HORSLEY: You know, the Fed has been worried that the job market was out of balance with demand for workers far outstripping supply. Today's report paints a picture of a more balanced job market, and forecasters now think it's increasingly likely that the Fed will leave interest rates unchanged when policymakers meet later this month.
SHAPIRO: So is the Fed done fighting inflation?
HORSLEY: No. Inflation has come down a lot from over 9% last summer to just over 3% in July. But that is still above the Fed's target of 2% inflation. So don't expect to see the central bank start cutting interest rates any time soon. The good news is that workers' pay is now going up faster than consumer prices. Today's report shows the average wages in August were up 4.3% from a year ago. That should be more than enough to outpace inflation. And even though paychecks are not growing as fast as they were a year ago, those paychecks are now stretching further, so workers have seen a real increase in their buying power.
SHAPIRO: NPR's Scott Horsley with the labor numbers this Labor Day weekend. Thank you.
HORSLEY: You bet. Transcript provided by NPR, Copyright NPR.