By Roy Maurer, SHRM.org (09/02/22)
Hiring slowed sharply in August but remained sturdy as employers added 315,000 jobs despite softer consumer spending gains, rising interest rates and a sputtering economy.
The unemployment rate rose from 3.5% to 3.7%, the Labor Department said Friday. That’s because the labor force — the number of people working and looking for jobs — shot up by nearly 800,000, with many of those on the sidelines streaming into a favorable labor market.
Economists surveyed by Bloomberg had estimated that 300,000 jobs were added last month.
Job gains for June and July were revised down by a total 107,000, painting a somewhat less booming picture of the labor market than previously believed. The change for July was small, still leaving that month with a blockbuster 526,000 additions. But the revision means the economy recovered all 22 million jobs lost in the pandemic in August rather than July as initially thought.
“The job market we see today can’t keep defying gravity and is falling back to Earth,” says Daniel Zhao, senior economist at Glassdoor, a leading job site.
What field has the highest job growth?
Professional and business services led the August advances with 68,000. Healthcare added 48,000 jobs; retail, 44,000; and manufacturing, 22,000.
Leisure and hospitality, which includes restaurants and bars, the sector hit hardest by the pandemic, added a relatively modest 31,000 jobs after averaging 90,000 the first seven months of the year. The sector, which has been struggling to find enough workers, remains 1.2 million jobs short of its pre-COVID level.
One encouraging sign: The portion of Americans working or looking for jobs jumped from 62.1% to 62.4%, matching the recent peak in March but still well below the pre-pandemic level of 63.4%.
That share had been rising as workers returned to a hot labor market after caring for children or staying idle because of COVID-19 fears. But it broadly edged down in recent months, suggesting widespread labor shortages could persist and push pay increases higher. That likely would further fuel inflation that’s close to a 40-year high.
In August, average hourly earnings rose 10 cents, keeping the annual increase unchanged at a still-hefty 5.2%.
Slowing job growth and the big rise in the labor force could help moderate inflation and lead the Federal Reserve to raise its key interest rate by half a percentage point this month instead of a third straight three-quarters point hike, says economist Michael Pearce of Capital Economics.
This article originally appeared on USA TODAY. Use this link to read the full article: August jobs report: Job market ‘falling back to earth,’ unemployment rises to 3.7%.