Job market stalls in August
San José, CA – On Friday, September 5, the Bureau of Labor Statistics reported that there were only 22,000 net new jobs created in August. This was the weakest number in the past four years. Even worse, the new job numbers for June and July were revised downward by 21,000, so that the revised June number was a net loss of 13,000 jobs.
The official unemployment rate in August, or “U-3”, ticked up to 4.3%, from 4.2% in July. This was the highest rate since 2021. While the unemployment rate for white Americans did not change, the unemployment rate for African Americans and Latinos both went up by 0.3%. The unemployment rate for Black Americans is now 7.5%, more than twice the rate for white Americans, which was 3.7%. Since African Americans have long been “last hired, first fired,” this increase points to higher overall unemployment in the near future.
The number of workers who are working part-time because they cannot find full time work because of the weak economy also rose, bringing the total unemployed and underemployed rate to 8.1%, again, the highest since 2021.
The positive number of net new jobs was held up by gains in health care and leisure and hospitality industries, which added a total of 75,000 net new jobs. But this was offset by losses of more than 50,000 jobs total in manufacturing, wholesale trade, temporary help services, the government, and other industries.
Manufacturing jobs fell by a net of 19,000, making this the fourth month in a row that manufacturing industries lost jobs. One example of this is farm equipment manufacturer John Deere, which announced hundreds more job cuts in August and has plans for more. U.S. farmers have been squeezed between the loss of export markets, especially China as a result of Trump trade wars, and the rising cost of farm equipment, and have cut back on new machinery orders.
Other measures for the health of the job market have also been in decline. On Thursday, the report on unemployment insurance claims showed another increase, this one of 8000 for the week ending August 30. The Job Opening and Labor Turnover Survey or JOLTS showed another drop in the number of job openings, falling below the number of unemployed. This is only the third time this has happened in more than four years.