Reclaiming Common Sense

The August Jobs Report Received a Lukewarm Reception

Wages were up in all Sectors - August Wage Record in All Sectors - Both Ignored

The August Jobs Report was strong and weak at the same time. The article "August Jobs Report Reveals Record August Jobs Level"  revealed that seasonally adjusted workers grew in all sectors August to August. It also revealed strong seasonally adjusted Current Population Survey Jobs growth, as well as the best CPS participation since August 2013 and the lowest August Unemployment Rate since 1969. The headline worker data was weaker than expected, except when you consider that all sectors have more workers than they had last August and all sectors received a pay raise from last August.

There was month to month growth in all but three sectors: Leisure and Hospitality (LAH,) Other Services (OS,) and Mining and Logging (M/L.) The decline in LAH and OS were anticipated. The largest percentage growth was observed in Government, Education and Health Services (EHS,) Professional Business Services (PBS,) Information (IT,) Construction, and Manufacturing. This was expected. There has been a considerable amount of attention to the Manufacturing "Magic Wand" that has been observed since the election of 2016.

There was August to August growth in all sectors. This was expected. The largest growth were recorded in Education and Health Services, Construction, and PBS, followed by Leisure and Hospitality and other services. This is good because we have seen record levels of job openings, especially in LAH, PBS, Trade, transportation and Utilities (TTU,) and EHS. We have record levels of workers in all but Construction, IT, and Manufacturing. Manufacturing and Construction continue to show year over year improvement.

The seasonally adjusted data paints a similar, yet slightly different picture. Only M/L and OS saw seasonally adjusted month to month declines in workers. The largest month to month growth was in Construction, Government, PBS, and Financial Activities. The largest August to August growth was reported in Construction, EHS, PBS, LHS and OS.

Every sector saw August to August to wage growth. All sectors either set all-time hourly wage records or August average age records. August wage records were set in PBS, LAH, and OS. All other sectors set all-time hourly wage records. Wage growth was up 3.17%, hours worked were up 3.11%, and total gross income was up 4.68%. Only Manufacturing and TTU saw drops in their hours worked, and even so, Manufacturing was at 40.1 hours.

We have a record level of private sector workers. They are earning record wages. The "worker Iceberg" is now a "Worker Mountain." Next up: How is President Trump doing compared to former Presidents Reagan, Clinton, George W. Bush and Obama?

It's the Economy.