August Hiring Slows to 151,000 Jobs; SHRM Predicts Slow September

Indicators for August 2016The dog days of August were upon employers last month, slowing their new non-farm hiring to a modest 151,000. At 4.9 percent, unemployment was unchanged from July.

This morning’s monthly report from the U.S. Labor Department was lower than the 175,000 to 185,000 new jobs economists were predicting. It was also off the pace of the previous two months; June saw 271,000 new jobs added, a revision down from the previously reported 292,000, and July came in at 275,000, revised up from 255,000.

“This expansion is getting long in the tooth, so it shouldn’t be too surprising that trend job growth would begin to moderate,” Ryan Sweet, a senior economist at Moody’s Analytics Inc., told Bloomberg.

August historically is a slow hiring month. In three of the previous August reports, the Labor Department reported job losses. Last month’s new job growth was nearly identical to the 150,000 new jobs created in August 2015. However, in 2015 employers averaged 218,600 new jobs a month through August; this year the average is 181,500.

SHRM’s LINE report forecasts slower hiring in September compared to a year ago. “Job creation rates will fall in both sectors compared with a year ago,” says the report. “Layoff rates will vary, as fewer manufacturers will cut jobs and more service-sector employers will conduct layoffs.”

Goods-producers Cut Jobs

This morning’s government numbers show contraction in most goods-producing industries pulled down the overall hiring numbers. Factories shed 14,000 jobs. Construction, which has seen significant job growth over the last several years, lost 6,000 jobs from slowdown in commercial building and heavy and civil engineering.

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Economists blame a strong U.S. dollar, turbulence in global markets, and the depressed petroleum industry for softening in manufacturing. The manufacturing index from Institute for Supply Management declined in August after expanding for the past five months. The report said, “Manufacturing contracted in August for the first time since February of this year.”

In the services sector, healthcare continued to add jobs, although more slowly than in recent months. In August, healthcare jobs grew by 14,400 with hospitals and doctors’ offices, clinics, and similar facilities leading the way. In other sectors:

  • Restaurants and bars added 28,700 new jobs.
  • Retail grew by 15,100 jobs.
  • Transportation and warehousing grew by 14,900.
  • The finance and insurance sector added 14,400 jobs.
  • Temporary employment shed 11,900 jobs.

Pay increased, but at a much slower rate than in July. Average hourly earnings for all employees on private non-farm payrolls rose by 3 cents to $25.73. Over the year, average hourly earnings have risen by 2.4%.

Unemployment has changed little this year. After declining in May to a low of 4.7 percent, the rate has remained at 4.9 percent since. Overall, there were 7.8 million unemployed persons in August. Other measures of labor utilization show that another 6.1 million are working part-time because they can’t find other work and another 1.7 million are not working, but have recently looked for work, though not during the survey period.

John Zappe is the editor of and a contributing editor of John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.