According to the Employment Situation Summary, the US labor market added 187,000 jobs in August. Economists predicted a lukewarm report similar to last month’s, keeping job gains steady and finally showing signs of cooling. The adjusted job gain in July was 157,000, down 30,000 from the initial report last month. Now the fear may be that the labor market cools too much leading to a recession. The Fed has been battling to bring down inflation while job and wage growth has continued to gain strength. Today’s report shows the pace of growth is moderating which is a long-range sign of a slowing economy. Student loan payments are resuming for many Americans in October, which will hopefully lead to a downturn in consumer spending and could help the effort to lower inflation.
The ADP National Employment Report showed an increase of 177,000 jobs. Nela Richardson, Chief Economist for ADP, said, “This month’s numbers are consistent with the pace of job creation before the pandemic. After two years of exceptional gains tied to the recovery, we’re moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede.”
The Consumer Confidence Survey released this week showed a downward trend from earlier in the summer as the labor market continues to cool. The index declined nearly 8 points in August from 114 in July to 106.1. Consumers’ short-term outlook, measured by the Expectations Index, declined sharply over the past month from 88.0 to 80.2, heading back toward the looming recession level of 80 or below. “Consumer confidence fell in August 2023, erasing back-to-back increases in June and July,” said Dana Peterson, Chief Economist at The Conference Board.
Healthcare led job gains in August with 71,000 added jobs, within the sector, ambulatory health care services added 40,000 jobs, nursing and residential care facilities added 17,000 jobs and hospitals added 15,000 jobs. Leisure and hospitality increased by 40,000 jobs and social assistance added 26,000 jobs. Employment in construction increased by 22,000 jobs while transportation and warehousing lost 37,000 jobs. Professional and business services added 19,000 jobs showing no net change since May. The average hourly earnings for nonfarm payrolls increased by 8 cents and over the past 12 months has increased 4.3%.