The American economy gained 201,000 jobs last month. We need 90,000 new jobs just to keep up with population growth, which means that net job growth clocked in at a fairly decent 111,000 jobs. The unemployment rate stayed flat at 3.9 percent. However, the number of people with jobs declined by 423,000; the number of unemployed workers barely changed; the labor force fell by nearly half a million; and the labor participation rate dropped from 62.9 percent to 62.7 percent. Overall, this is a pretty mediocre jobs report.
Wages of production and nonsupervisory workers were up at an annualized rate of 3.9 percent. Not bad! Inflation is running at 2.9 percent right now, so this represents a real pay raise of about 1 percent.
It’s hard to know what to think of this report. The jobs increase isn’t bad, but the rest of it ranged from mediocre to lousy. Blue-collar wages were up, but we’ve seen good months before followed immediately by bad ones. Even with August’s nice wage number, wage growth for the previous 12 months is 2.8 percent, slightly below the inflation rate. We’ll need many more months of high growth before we put together a solid year.