In August, the US economy outperformed expectations by adding 187,000 jobs, as revealed by the Bureau of Labor Statistics. This monthly employment figure closely resembled the prior month, though it’s worth noting that July’s total was revised downward by 30,000 jobs to 157,000, and June also saw a significant revision, dropping from 185,000 to 105,000, according to CNN’s report.
Economists had predicted total job gains of 170,000, according to Refinitiv’s projections. However, it’s important to recognize that this August figure still represents a slowdown compared to the robust job growth experienced in the past two years. All of this occurs as the Federal Reserve works to combat inflation without causing widespread unemployment.
Unexpectedly, the unemployment rate inched up, rising from 3.5% to 3.8%. It had remained relatively stable, fluctuating between 3.4% and 3.7% since March 2022, defying economists’ expectations that it would remain steady at 3.5%, as reported by CNN.
Commenting on these developments, Becky Frankiewicz, President and Chief Commercial Officer at ManpowerGroup, stated, “With 187,000 new jobs added in August 2023 and unemployment at 3.8%, after the red-hot hiring post-pandemic, we are witnessing a gradual transition to a cooler labor market this Labor Day weekend. With lingering ‘pandemic paranoia’ about hiring, companies are holding onto their workers, recalling the challenges of rehiring.”
The increase in unemployment in August, highlighted in the BLS report, was due to both job losses and the conclusion of temporary employment positions. This group expanded by 294,000, reaching 2.9 million in August, offsetting the decrease of 280,000 observed in July. Additionally, the number of newcomers entering the workforce saw a slight increase to 597,000, according to CNN.
An important note is the labor force participation rate, which reached 62.8%, marking its highest level since the onset of the Covid-19 pandemic.