Last Update: 06-Sep-13 08:58 ET
Weakness in Payrolls Offset By Strong Gains in Aggregate Earnings
Nonfarm payrolls added 169,000 jobs in August. That was up from a downwardly revised 104,000 (from 162,000) new jobs in July, but below the Briefing.com consensus expectation of 177,000 new jobs. Government payrolls reversed directions and added 17,000 new jobs in August after shedding 23,000 jobs in July. Many of these gains, however, may be due to seasonal adjustment biases as the fall school session began earlier in the month than normal. Private payrolls increased by 152,000 jobs in August after adding 127,000 (from 161,000) in July. The consensus expected 180,000 new private payrolls. With the exception of the information sector (-18,000), financial activities sector (-5,000) and construction sector (unchanged), all labor sectors added jobs in August. The largest gains came from retail (44,000) and education and health services (43,000). Fortunately, some of the underlying trends do point toward solid economic gains for the third quarter.
The average workweek increased to 34.5 in August from 34.4. Average hourly earnings increased 0.2% to $24.05. Altogether, aggregate earnings increased a solid 0.6%, which should be enough to keep consumption growth moving upwards amid the weak stock market performance in August. The fact that consumption growth is poised to accelerate in August should offset an negativity felt by the disappointing payroll gains. The unemployment rate ticked down to 7.3% in August from 7.4% in July. The drop in the unemployment rate, however, was not due to strengthening trends in the labor sector. Instead, the entire dip in the unemployment rate was due to the labor force declining by 312,000 people in August. The number of people employed fell by 115,000. If the labor force participation rate remained at July levels, the unemployment rate would have increased to nearly 7.6%.
Nonfarm payrolls added 169,000 jobs in August. That was up from a downwardly revised 104,000 (from 162,000) new jobs in July, but below the