September 2, 2016

August 2016 Jobs Report

Unemployment Rate: 4.9 percent

Unemployed Americans: 7.8 million

Employment and Unemployment

  1. The Department of Labor reported an unemployment rate of 4.9 percent for August, unchanged from last month.
  2. The jobs report shows an increase of 151,000 nonfarm jobs in August, lower than analysts’ prediction of job growth around 180,000. Employment for June was revised down from 292,000 to 271,000 jobs created; and July was revised up from 255,000 to 275,000.
  3. In 2016, employment growth has averaged 181,500 per month, down from 229,000 per month in 2015.
  4. Unemployment in August among those ages 16-19 was 15.7 percent, up 0.1 percentage points from last month. For people of Hispanic or Latino ethnicity, the unemployment rate was 5.6 percent, up 0.2 percentage points from July. For African-Americans, the unemployment rate was 8.1 percent, down 0.3 percentage points from the prior month.
  5. The number of long-term unemployed, those unemployed for 27 weeks or more, was 2 million, unchanged from last month. They account for 26.1 percent of the unemployed, down from 26.1 percent in the prior month.
  6. The “real” unemployment or U-6 rate is 9.7 percent, unchanged from last month. This is the total percentage of unemployed and underemployed workers.
  7. The “real” number of unemployed Americans is 15.6 million. These are people who are unemployed (7.8 million), want work but have stopped searching for a job (1.7 million), or are working part time because they cannot find full-time employment (6.1 million). 
  8. In August, employment grew by 34,000 in food services and drinking places; 22,000 in social assistance; 20,000 in professional and technical services; and 14,000 in health care. Employment in government grew by 25,000 jobs in August, with 24,000 at the local government level. Employment in mining fell by 4,000 last month. Since reaching a peak in September 2014, employment in mining has fallen by 223,000. Employment also fell in manufacturing by 14,000 and by 6,000 in construction in August.
  9. While the Federal Reserve raised its main interest rate by 0.25 percent in December 2015, a weak employment report in May and global risks have caused the Fed to hold interest rates at this level. At the Federal Reserve conference last week, Fed Chair Janet Yellen stated: “the FOMC continues to anticipate that gradual increases in the federal funds rate will be appropriate over time to achieve and sustain employment and inflation near our statutory objectives. Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months. Of course, our decisions always depend on the degree to which incoming data continues to confirm the Committee's outlook.”
  10. The next meeting of the Federal Reserve’s Federal Open Market Committee is September 20-21. 

Labor Force Participation

  1. The labor force participation rate is 62.8 percent, unchanged from last month and remaining near the lowest level in 38 years. The persistently low labor force participation rate shows that millions of Americans are staying on the sidelines. Since October 2013, the participation rate has largely been stuck in a narrow range of 62.5 to 63 percent. Prior to the recession, the rate was 66 percent. 
  2. If the labor force participation rate were the same as when President Obama took office, the unemployment rate would be 9.1 percent.
  3. The share of American adults with jobs in August was 59.7 percent, unchanged from last month. This is nearly 4 percentage points below its pre-recession peak.


  1. In August, average hourly earnings for all employees on private nonfarm payrolls increased by 3 cents to $25.73. Over the year, average hourly earnings have risen by 2.4 percent.
  2. August was the 85th straight month that year-over-year hourly wage growth has been at or below 2.6 percent. Prior to the recession, wage growth routinely exceeded 3 percent.

Issue Tag: Labor