Unemployment Remains Little Changed in August

September 6, 2024 – Employment rose by 142,000 in August as the U.S. unemployment rate dipped slightly to 4.2 percent, according to the most recent U.S. Bureau of Labor Statistics report. The number of unemployed persons was 7.1 million in August. These measures are higher than a year earlier, when the jobless rate was 3.8 percent, and the number of unemployed people was 6.3 million. Job gains occurred in construction and healthcare. “This is the biggest jobs report in a number of years in terms of its importance for the Fed and how much it corroborates [the weakness] we’ve seen in other more closely watched labor market data,” said Sarah House, an economist at Wells Fargo.
“It’s a solid report with decent job gains, wage growth beating price growth, and an important tick down in the unemployment rate,” Jared Bernstein, chair of the White House’s Council of Economic Advisers, told The Washington Post. “Simply put, we’ve got jobs and wages up, and inflation and unemployment down.”
Among the unemployed, the number of people on temporary layoff declined by 190,000 to 872,000 in August, mostly offsetting an increase in the prior month. The number of permanent job losers was essentially unchanged at 1.7 million in August. The number of long-term unemployed (those jobless for 27 weeks or more) was virtually unchanged at 1.5 million in August. The long-term unemployed accounted for 21.3 percent of all unemployed people. The labor force participation rate remained at 62.7 percent in August and is little changed over the year. The employment-population ratio also was unchanged in August, at 60.0 percent, but is down by 0.4 percentage point over the year.
The number of people employed part time for economic reasons was little changed at 4.8 million in August. This measure is up from 4.2 million a year earlier. These individuals would have preferred fulltime employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. The number of people not in the labor force who currently want a job, at 5.6 million, changed little in August. These individuals were not counted as unemployed because they were not actively looking for work during the four weeks preceding the survey or were unavailable to take a job.
Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force, at 1.4 million, was little changed in August. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, changed little at 367,000 in August.
Related: Global Hiring Intentions Hold Steady from Q2, Drop Year-over-Year
“Rarely has there been such a make or break number – unfortunately, today’s jobs report doesn’t entirely resolve the recession debate,” said Seema Shah, chief global strategist at Principal Asset Management. “Significant negative revisions to July’s already weak number, coupled with a softer-than-expected August number, offset the good news from the fall in the unemployment rate and rise in hours worked.”
More Than Half of U.S. Companies Anticipate Adding New Positions in the Second Half of 2024
Fifty-two percent of companies in the United States plan to add new permanent positions in the second half of the year, according to new research from talent solutions and business consulting firm Robert Half. Another 43 percent plan to fill for vacated positions, and 57 percent said they plan to increase the number of contract professionals on staff, down 10 percentage points from the first half of 2024.
“Today’s workers are more selective when it comes to making a career move,” said Dawn Fay, operational president of Robert Half. “Employers should have a strategic hiring plan in place and remain flexible in order to land in-demand talent and keep projects on track and workloads in check. While hiring remains a priority, employers shouldn’t lose sight of their current workforce. Skilled talent is still in high demand, so it’s crucial to prioritize retention strategies to keep your best employees on board.”
“While the bears have plenty to work with – in terms of a softening labor market and a slowing economy – the facts still show an economy that is expanding and not one that is imminently headed into recession,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
Where Job Growth Occurred
- Construction employment rose by 34,000 in August, higher than the average monthly gain of 19,000 over the prior 12 months. Over the month, heavy and civil engineering construction added 14,000 jobs, and employment in nonresidential specialty trade contractors continued to trend up (+14,000).
- Healthcare added 31,000 jobs in August, about half the average monthly gain of 60,000 over the prior 12 months. In August, employment rose in ambulatory healthcare services (+24,000) and hospitals (+10,000).
- In August, employment in social assistance continued its upward trend (+13,000) but at a slower pace than the average monthly gain over the prior 12 months (+21,000). Individual and family services added 18,000 jobs over the month.
- Employment in manufacturing edged down in August (-24,000), reflecting a decline of 25,000 in durable goods industries. Manufacturing employment has shown little net change over the year.
- Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; wholesale trade; retail trade; transportation and warehousing; information; financial activities; professional and business services; leisure and hospitality; other services; and government.
Related: Hiring Confidence Slows as Employers Steer Economic Headwinds
Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media