Unemployment Up, Job Gains Robust, More People on Sidelines, Latent Demand from AJSN 145,000 Higher

In this morning’s Bureau of Labor Statistics Employment Situation Summary, we were supposed to be keying on the number of net new nonfarm payroll positions, often just referred to as “jobs.”  It was a fine one, 187,000, an even ten percent over a published 170,000 estimate.  As excellent as that is and keeps being, with total population growth lower, some other outcomes were more surprising and less favorable.

Seasonally adjusted unemployment jumped 0.3% to 3.8%, with the unadjusted variety up 0.1% to 3.9%.  That reflected lower than seasonally expected August hiring, or, more likely, additional firing or layoffs, an effect from bankruptcies (Yellow Corporation) and strikes (Screen Actors Guild – American Federation of Television and Radio Artists).  The number of officially unemployed gained 600,000 to 6.4 million, and those with jobs fell 55,000 to 161,427,000.  The count of those claiming no interest in work also increased 600,000, reaching 93,682,000.  The number of long-term unemployed, in that state for 12 months or longer, also rose, 100,000 to 1.3 million, while those working part-time for economic reasons, or holding shorter-hours jobs while seeking full-time ones, tacked on another 200,000 to 4.2 million.  The two measures of how common it is for Americans to be either working or officially jobless, the labor force participation rate and the employment-population ratio, gained 0.2% and broke even respectively, ending at 62.8% and 60.4%.  Average hourly private nonfarm payroll earnings gained 8 cents per hour, a tiny bit less than inflation, to $33.82. 

The American Job Shortage Number or AJSN, the measure showing how many additional positions could be quickly and easily filled if getting one were perceived as no more difficult than another household errand, rose modestly to the following:

The AJSN added 226,000 from higher unemployment, but lost overall in categories of marginal attachment, mostly those wanting work but not looking for it for a year or more.  The share of the AJSN from people officially jobless is still a clear minority, 35.5%, up 1.1%.  There was remarkably little year-over-year AJSN difference, a 116,000 increase, following the same pattern as the change from July 2023, as higher unemployment was partially offset by a smaller number of those not putting forth searching efforts for 12 months or longer. 

What happened here?  It seemed that there was a real mixture of people thrown out of work, probably in the case of truckers and writers temporarily, those deciding not to make themselves available for a while, and solid growth otherwise.  The weakest outcomes, such as total unemployment, wages, and the count of those working part-time for economic reasons, gave back only parts of recent improvements.  The bottom line is indeed that 187,000.  Few have acknowledged how favorable it is for our labor force to be continuously growing, but there is no reason for that to be happening, month after month after month.  We would have a strong economy even if we averaged 100,000 fewer.  If negative trends continue this month we may not be able to say this, but, once more, the turtle took another step forward.