Employment Situation (August 2014) published by Bruce Steinberg, September 5, 2014
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AUGUST 2014 EMPLOYMENT REPORT
The unemployment rate incrementally declined, which the U.S. Bureau of Labor Statistics characterized as “changed little,” to 6.1 percent in August; it was 6.2 percent in July and 7.2 percent a year ago in August 2013. For more detail, see the “Household Survey” section at the bottom of this column.
On the other side of the monthly employment situation, the total number of jobs was up only 142,000 in most, but not all, sectors, which is a bit of a disappointment from the July’s increase of 212,000, which was down from June’s growth of 267,000. A year earlier, in August 2013, total job growth was up 202,000.
Total private-sector jobs grew by only 134,000 in August and was a fairly hard deceleration from July’s growth of 213,000 and more so from June’s addition of 260,000. A year earlier in August 2013, the private-sector grew payrolls by 180,000. The weakness in the jobs numbers was seen in both the Goods-producing and Service-providing sectors.
The private Goods-producing sector grew by only 22,000 jobs in August compared to growth of 67,000 in July.
- Building new jobs by the Construction sector slowed to growth of only 20,000 in August compared to an increase of 31,000 in July.
- Manufacturers were flat neither adding nor removing jobs on net. Job growth in Durable goods was only 2,000, even when accounting for the 4,600 job decline in Motor vehicles and parts. Nondurable goods continued to drift lower with a decline of 2,000 in August, the same number it lost in July.
- Mining and logging brought 2,000 more jobs up into the economy in August, with the Support activities for mining portion of the mining sub-sector again responsible for the vast majority of those new jobs; in July, Mining and logging added 8,000.
The private Service-providing sector continued to apply the brakes and slowing to only 112,000 more jobs in August after adding 146,000 in July and growing by 226,000 in June; in August 2013 it added 163,000.
- The Retail trade sector rang up 8,400 returns (decrease) after adding 20,900 in July. In case you were thinking this was just because the summer selling season ended in August, you would be wrong because a year ago, in August 2013, this sector added 29,400 jobs.
- The pace at Wholesale trade was fairly steady with growth of 6,500 in August after adding 6,000 in July, but this was not as good as either the 12,900 it added in June 2014 nor the 10,400 it expanded by a year ago in August 2013.
- Hiring came to an abrupt slowdown in the Transportation and warehousing sector that only added 1,200 jobs in August after bringing 19,200 new jobs in board in July.
- Financial activities employers still had some, but not much, interest to add to its payrolls with 7,000 more jobs in August after adding 10,000 the previous month; but it was certainly an improvement from the 4,000 decline of August 2013.
- The Professional and business services sector’s job growth picked up a bit with 47,000 more jobs in August after adding only 36,000 in July. Computer systems design and related services added only 1,500 jobs in August, but even that was an improvement from the 600 it lost in July. Management and technical consulting services was able to grow by 3,000 jobs in August on top of adding 4,300 in July; Architectural and engineering services added 2,700 jobs in August.
- The Education and health services sector added a total of 37,000 jobs in August with the sector’s highly seasonal Educational services sub-sector declining by 6,300. Therefore, growth in the Health care and social assistance portion was 42,700 which was a bit of an improvement from the 40,100 increase in July, in August 2013 it added 57,800 jobs. Home health care services was up by 3,800 in August, which was double July’s increase of 1,900.
- New hiring in the Leisure and hospitality sector at 15,000 in August was only slightly better than the 12,000 it added in July; but in August 2013, this sector added 34,000.
The total number of Government jobs was up by 8,000. The federal government added 3,000 jobs; State government was up by 1,000; and Local government increased by 4,000
Temporary Help Services Roundup
Although Temporary Help Services continued to grow and reach new highs, the rate of growth fluctuated. In August, Temporary help services was up 13,000 to 2,896,200, which was a 0.5 percent month-over-month increase and year-on-year growth of 8.0 percent.
In July, the job number was up 9,700, or 0.3 percent sequentially and up 8.2 percent year-on-year; in June, temporary help added 15,000 jobs, which was a 0.5 percent sequential growth and an 8.3 percent increase year-on-year. Take note that the year-on-year growth is decelerating.
Temporary help service’s market share — that is its portion of all jobs — continued to rise up and reached an all-time high of 2.082 percent in August compared to 2.075 percent in July; it was 1.962 percent in August 2013. Chart of Temporary help’s growth from January 1991 to August 2014 and comparing the trend to total employment.
The August 6.1 percent unemployment rate was a 0.1 percent decline from July’s 6.2 percent; it was 7.2 percent in August 2013.
That 6.1 percent unemployment rate was the result of a labor force that contracted by 64,000 as the number of employed persons grew by only 16,000 as the number of unemployed persons declined by 80,000. The number not in the labor force increased by 268,000.
The employment-to-population ratio was unchanged at 59.0 percent in August and up from 58.6 percent a year earlier. The labor force participation rate incrementally declined to 62.8 percent (was 62.9 percent in July), and it was lower than the 63.2 percent a year earlier. The number of discouraged workers continued to decline with only 775,000 of them compared to 866,000 a year earlier in August 2013.