Briefing.com: Nonfarm Payrolls

Updated: 01-Sep-23 09:19 ET

August Nonfarm Payrolls

Updated: 01-Sep-23 09:19 ET

Highlights

The August Employment Situation Report featured a softening in nonfarm payrolls after accounting for revisions, a jump in the unemployment rate to 3.8%, and a moderation in average hourly earnings growth.

Key Factors

August nonfarm payrolls increased by 187,000 (Briefing.com consensus 175,000). The 3-month average for total nonfarm payrolls fell to 150,000 from 181,000. July nonfarm payrolls revised to 157,000 from 187,000. June nonfarm payrolls revised to 105,000 from 185,000.
August private sector payrolls increased by 179,000 (Briefing.com consensus 160,000). July private sector payrolls revised to 155,000 from 172,000. June private sector payrolls revised to 86,000 from 128,000.
August unemployment rate was 3.8% (Briefing.com consensus 3.6%), versus 3.5% in July. Persons unemployed for 27 weeks or more accounted for 20.3% of the unemployed versus 19.9% in July. The U6 unemployment rate, which accounts for unemployed and underemployed workers, was 7.1% versus 6.7% in July.
August average hourly earnings were up 0.2% (Briefing.com consensus 0.3%) versus 0.4% in July. Over the last 12 months, average hourly earnings have risen 4.3%, versus 4.4% for the 12 months ending in July.
The average workweek in August was 34.4 hours (Briefing.com consensus 34.3), versus 34.3 hours in July. Manufacturing workweek was 40.1 hours for the fifth straight month. Factory overtime dipped 0.1 hour to 3.0 hours.
The labor force participation rate was 62.8% versus 62.6% in July.
The employment-population ratio held steady at 60.4%.

Big Picture

Altogether the key takeaway from the report is that it was a Goldilocks report as it pertains to the market's thinking that the Fed won't be raising rates again.
There are clear signs of softening in the employment situation, including a decline in temporary positions, an uptick in the percentage of workers unemployed for 27 weeks or more, and a pickup in the U6 unemployment rate, which accounts for underemployed workers. That softening is exactly what the Fed has been expecting to see -- and hoping to see -- in response to its campaign to get inflation back down to its 2.0% target.