"August Curse" Continues As Payrolls Miss, Rise By Only 151,000; Hourly Earnings Disappoint

With Wall Street expecting another solid month of payroll growth, following multiple-sigma outlier prints in June and July, the whisper expectations was for a miss on the back of the previously discussed "August Curse" which has seen a consistent miss in the month of August for the past decade, and that is precisely what happened when moments ago the BLS reported that in the month of August only 151K jobs were added, missing the consensus of 180K job growth by nearly 30,000 jobs.

 

Putting the miss in context:


The household survey did not bring any offsetting good news either as reported employment rose only 97,000 in August to 151.614 million.

The birth-death adjustment added 106K "jobs" to the unadjusted number.

The unemployment rate remained flat at 4.9%, despite expectations of a decline to 4.8%, while hourly earnings rose just 0.1%, also missing expectations of 0.2% increase, and down sharply from last month's 0.3% rebound.

The labor force participation rate remained flat at 62.8% as the number of people not in the labor force rose by 58,000.

 

Most troubling is that the "any minute now" jump in wages refuses to arrive, with average hourly earnings rising just 0.1% in August, well below the 0.3% increase in July. Worse, average weekly earnings actually posted a sharp decline, sliding from $884.08 to $882.54, slamming the annual growth rate to the lowest since early 2014.

 

More data from the Establishment Survey:

Total nonfarm payroll employment rose by 151,000 in August, compared with an average monthly gain of 204,000 over the prior 12 months. Employment continued to trend up in several service-providing industries.

Employment in food services and drinking places continued to trend up over the month (+34,000). Over the year, the industry has added 312,000 jobs.

Social assistance added 22,000 jobs over the month, with most of the growth in individual and family services (+17,000).

In August, employment in professional and technical services edged up (+20,000), about in line with its average monthly gain over the prior 12 months (+24,000).

Financial activities employment continued on an upward trend in August (+15,000), with a gain in securities, commodity contracts, and investments (+6,000). Over the year, financial activities has added 167,000 jobs.

Health care employment continued to trend up in August (+14,000), but at a slower pace than the average monthly gain over the prior 12 months (+39,000). In August, hospitals added 11,000 jobs, and employment in ambulatory health care services trended up (+13,000). A job loss in nursing and residential care facilities (-9,000) offset a gain in July.

Employment in mining continued to trend down in August (-4,000). Since reaching a peak in September 2014, employment in mining has declined by 223,000, with losses concentrated in support activities for mining.

Employment in several other industries--including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, temporary help services, and government--changed little over the month.

The average workweek for all employees on private nonfarm payrolls decreased by 0.1 hour to 34.3 hours in August. In manufacturing, the workweek declined by 0.2 hour to 40.6 hours, while overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.6 hours.

In August, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $25.73. Over the year, average hourly earnings have risen by 2.4 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.64 in August.

The change in total nonfarm payroll employment for June was revised down from +292,000 to +271,000, and the change for July was revised up from +255,000 to +275,000. With these revisions, employment gains in June and July combined were 1,000 less than previously reported. Over the past 3 months, job gains have averaged 232,000 per month.