The labor market continued its expansionary trajectory in August. Here are the five things we learned from U.S. economic data released during the week ending September 2.
Hiring remained solid during late summer. Nonfarm payrolls grew by a seasonally adjusted 315,000 in August. The Bureau of Labor Statistics indicates that payrolls have grown by 5.8 million over the past year and were 240,000 above their February 2020 pre-pandemic peak. The BLS, however, sharply revised downward its June payrolls estimate by 105,000 and had a smaller revision for July (-2,000). The private sector added 308,000 workers in August, split between 263,000 in the service sector and 45,000 in the goods-producing side of the economy. Industries adding the most workers were health care/social assistance (+61,500), retail (+44,000), and leisure/hospitality (+31,000). Average weekly earnings of $1,116.42 were up 4.6 percent from a year earlier.
A separate households survey finds the unemployment rate rising 2/10ths of a percentage point to a still-low 3.7 percent. 786,000 people entered the labor force, pushing the labor force participation rate to 62.4 percent. The 25 to 54 participation rate jumped 4/10ths of a percentage point to a pandemic-high of 82.8 percent. The median length of unemployment held steady at 8.5 weeks. Edging up where the number of part-time workers seeking a full-time opportunity (up 225,000 to 4.149 million) and the broadest measure of labor underutilization (up 3/10ths of a percentage point to 7.0 percent).
Employers were still on the look for even more workers. There were a seasonally adjusted 11.239 million open jobs at the end of July, up 199,000 for the month and near record levels for the Bureau of Labor Statistics data series. Industries with at least a million open positions were professional/business services, health care/social assistance, and accommodation/food services. Retailers sought to fill 970,000 jobs, while manufacturers were looking for 834,000 workers. Hiring slowed by 74,000 to 6.382 million. Adding the most workers were professional/business services (1.263 million), accommodation/food services (941,000), retail (790,000), and health care/social assistance (780,000). Separations slipped by 80,000 to 5.929 million. Layoffs held steady at 1.398 million but quits decreased by 74,000 to 4.179 million.
Construction spending wobbled in July. The Census Bureau estimates the value of construction put in place declined 0.4 percent to a seasonally adjusted annualized rate (SAAR) of $1.777 trillion. Despite the decline, year-to-date spending was 10.8 percent ahead of its comparable 2021 pace. Private sector spending dropped 0.8 percent to an annualized $1.424 trillion, pulled down by a 1.5 percent drop in residential construction. New single-family home construction plummeted 4.0 percent, while that for multi-family units slowed 0.6 percent. Nonresidential private sector expenditures increased 0.4 percent in July. Public sector construction spending increased 1.5 percent in July.
Purchasing managers report stable growth in manufacturing. The PMI, the headline index from the Institute for Supply Management’s Manufacturing Report on Business, held steady in August at a reading of 52.8. The PMI has remained above a reading of 50.0—the threshold between an expanding and contracting manufacturing sector—for 26 straight months. Measures for new orders and employment improved, while those for production and inventories slumped. Ten of 18 tracked manufacturing sectors expanded during the month, led by nonmetallic mineral products, petroleum/coal products, and transportation equipment. Seven other industries contracted, led by wood products, apparel, and furniture.
Factory orders fell for the first time in 10 months in July. The Census Bureau reports that new orders for manufactured goods dropped 1.0 percent to a seasonally adjusted $548.5 billion. Durable and nondurable goods fell 0.1 percent and 1.7 percent, respectively, while civilian nonaircraft capital goods orders edged up 0.3 percent. Shipments’ winning streak ended after 16 consecutive increases, slumping 0.9 percent to $545.5 billion. A 1.9 percent drop in nondurable goods shipments outpaced a 0.4 percent gain for durables. Unfilled orders rose 0.7 percent (its 23rd straight increase) to $1.127 trillion, while inventories grew 0.1 percent to $802.0 billion.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending August 27, 2022, First-Time Claims, seasonally adjusted): 232,000, -5,000 vs. the previous week, -152,000 vs. the same week a year earlier). 4-week moving average: 241,500 (-39.5% vs. the same week a year earlier).
- Conference Board (August 2022, Index (1985=100), seasonally adjusted): 103.2 (vs July 2022: 95.3; vs. August 2021: 115.2).
- New Vehicles (August 2022, Light Trucks and Autos, seasonally adjusted annualized rate): 13.181 million (-1.1% vs. July 2022; +0.7% vs. August 2021).
- Productivity (2022Q2-Revised, Nonfarm Labor Productivity, seasonally adjusted annualized rate): -4.1% vs. 2022Q1; -2.4% vs. 2021Q2.
- FHFA House Price Index (June 2022, Purchase-Only Index, seasonally adjusted): +0.1% vs. May 2022; 16.2% vs. June 2021).
- S&P Case-Shiller Home Price Index (June 2022, National Index, seasonally adjusted): +0.3% vs. May 2022; +18.0% vs. June 2021).
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What We Learned About the U.S. Economy Last Week 