'Couldn’t Be Much Better': Economists React To The August Jobs Report On X, Formerly Twitter
Nonfarm payroll employment rose by 187,000 jobs in August, a bit higher than consensus estimates, the U.S. Bureau of Labor Statistics reported Friday.
The unemployment rate rose from 3.5% to 3.8%, driven by an increase in labor force participation rates. The unemployment rate had been at or below 3.7% since the end of the first quarter of 2022.
Employment in leisure and hospitality continued to trend upward in August, adding 40,000 jobs. The sector has averaged 61,000 job gains a month over the past year and is now 290,000 jobs short of its pre-pandemic employment rate.
The construction industry also had a healthy showing in August, adding 22,000 jobs. The sector has averaged growth of 17,000 jobs per month over the prior 12 months.
Job losses were heaviest in the transportation and warehousing sector, which lost 34,000 jobs in August; the Bureau of Labor Statistics attributed the decline to the business closure at Yellow.
Here's how economists and others reacted to the jobs report on X, formerly Twitter:
JUST IN: The US economy added 187,000 jobs in August – beating expectations and showing the labor market remains strong. (Tho big downward revisions for July and June)
— Heather Long (@byHeatherLong) September 1, 2023
Unemployment rate ticked up to 3.8%
Wages: grew 0.2% in August and 4.3% in past yr
Today's jobs report is pretty much what the Fed had been hoping for: slowing payroll growth (esp considering the revisions), rising unemployment rate as more workers come into the labor market, modest wage gains. #SoftLanding?
— David Wessel (@davidmwessel) September 1, 2023
The August jobs report couldn’t be much better. Job growth is solid but slowing. Unemployment rose, but for that right reason - more labor supply as participation jumped. Wage growth continues to moderate and hours worked rose. The report has soft landing written all over it.
— Mark Zandi (@Markzandi) September 1, 2023
Overall a just great report for the monetary doves and soft landing crowd.
— Neil Irwin (@Neil_Irwin) September 1, 2023
Payroll growth is moderate, unemployment rate rising but because of positive supply-side shift (expanded labor force), wage growth comes in soft.
Big picture: This is consistent with continued moderation in inflation. But not remotely cause for panic about the economic trajectory, still a lot of jobs being added and high employment. No need for the Fed to move in September and I would be shocked if they saw it differently.
— Jason Furman (@jasonfurman) September 1, 2023
The rise in the unemployment rate might cause concern in some quarter, but I'm less worried. Looking beyond the month-to-month sawtooth, the underlying pace of jobs growth is +150k per month, which is more than enough to keep unemployment stable or falling.
— Justin Wolfers (@JustinWolfers) September 1, 2023
According to the survey -- and this is what produced the jump in the unemployment rate -- there was a 700,000+ person increase in the number of people entering the labor force looking for jobs. https://t.co/SxrtfKB4Ee pic.twitter.com/z6KdJ6WfYn
— Joe Weisenthal (@TheStalwart) September 1, 2023
Manufacturing employment now up 212k from Feb 2020 level
— Dean Baker (@DeanBaker13) September 1, 2023
Note that employment in truck transportation fell 37,000, primarily driven by the bankruptcy of Yellow. Motion picture & sound recording employment fell 17,000, mostly reflecting effects from the SAG-AFTRA strike. 2/
— Council of Economic Advisers (@WhiteHouseCEA) September 1, 2023
Look at *where* jobs were added in July. There's starting to be a real divergence
— Heather Long (@byHeatherLong) September 1, 2023
Healthcare +71,000
Hospitality +40,000
Social assist +26,000
Construction +22,000
Professional services +21,000
Truck transport -37,000
**Temp help -19,000 (Temp help is -242,000 since its peak…
A soft landing requires slowing, but not stalling the economy and that is the miracle that the Fed is achieving (knock on wood, still a ways to go ). https://t.co/GKBefun8ht
— Betsey Stevenson (@BetseyStevenson) September 1, 2023
"Short-term soft landing (supply chain improvements), medium term possible overheating unless aggregate income growth slows further" makes sense as a view.
— Conor Sen (@conorsen) September 1, 2023
In sum,
— Aaron Sojourner (@aaronsojourner) September 1, 2023
- real wage gains normalizing elevated profit margins,
- signals consistent with soft landing, approaching both full employment & price stability, quite unique & great,
- Fed risk, rates too high too long changes to hard landing that kills jobs, Fed's job tough pic.twitter.com/oudMqI4JSa
