August 2015 Jobs Report

Unemployment Rate: 5.1 percent

Unemployed Americans: 8.0 million

Employment and Unemployment

1. Employment growth slowed in August with the unemployment rate falling more than expected due to a smaller labor force.
2. The Department of Labor reported an unemployment rate of 5.1 percent for August, down 0.2 percent from last month. It reported an increase of 173,000 nonfarm jobs in August. Economists had projected job growth in August to be 220,000. Employment for June was revised up from 231,000 to 245,000 jobs created; and July was revised up from 215,000 to 245,000.   
3. Unemployment in August among those ages 16-19 was 16.9 percent, up 0.7 percentage points from last month. Among those 20-24, the unemployment rate was 8.9 percent, down 1.2 percentage point from August. For African Americans, the unemployment rate was 9.5 percent, up from 9.1 percent.
4. The number of long-term unemployed, those unemployed for 27 weeks or more, was 2.2 million, accounting for 27.7 percent of the unemployed, up from 26.9 percent in the prior month.
5. The “real” unemployment or U-6 rate is 10.3 percent, down 0.1 percentage point from July. This is the total percentage of unemployed and underemployed workers.
6. The “real” number of unemployed Americans is 16.3 million. These are people who are unemployed (8.0 million), want work but have stopped searching for a job (1.8 million), or are working part time because they cannot find full time employment (6.5 million).
7. In August, employment grew by 41,000 in health care; 33,000 in professional and technical services; and 19,000 in financial activities. There was little to no change in employment in construction, wholesale trade, retail trade, and government. Employment in manufacturing fell last month by 17,000. Employment in mining fell by 9,000 in August, and has declined by 90,000 since December 2014. 

Labor Force Participation

1. The labor force participation rate is 62.6 percent, unchanged from last month and the lowest level in nearly 38 years. The persistently low labor force participation rate shows that millions of Americans are staying on the sidelines. Since April 2014, the participation rate had been stuck in a narrow range of 62.6 and 62.9 percent. Prior to the recession, the rate stood at 66 percent. 
2. If the labor force participation rate were the same as when President Obama took office, the unemployment rate would be 9.7 percent.
3. The share of American adults with jobs in August was 59.4 percent, up 0.1 from July. This is about four percentage points below its pre-recession peak.
4. The Federal Reserve has been weighing whether to raise its short-term interest rate for the first time in almost a decade. The rate has remained near zero since 2008 in an effort to boost the economy. As noted in Market Watch, a few weeks ago, the Fed it waiting to see “some further improvement” in the labor market before it went ahead. The Fed will meet September 16-17. 

Wages

1. Average hourly earnings for all employees on private nonfarm payrolls rose by eight cents to $25.09. Over the year, average hourly earnings have risen by only 2.2 percent.
2. August was the 73rd straight month that year-over-year hourly wage growth has been below 2.5 percent. Prior to the recession, wage growth routinely exceeded three percent.