August Jobs Report: Wage Growth Finally Increases

Sep 10, 2018
| Michael Altiero
August Jobs Report

The beginning of a new month means the anticipated release of the latest Jobs Report by the Bureau of Labor Statistics.

Last month’s report was seen as both positive and negative, as though unemployment rate decreased back under 4% (3.9%), wage growth continued to remain stagnant at 2.7%.

Economists and industry professionals alike were eagerly anticipating the results of the August Jobs Report to see if wage growth finally took a positive turn. On September 7th, the Bureau of Labor Statistics released the results of the latest jobs report, and the results were exactly what experts were hoping for.

Wage Growth Rose in August, Reaching a 9 Year High

When the August Jobs Report was released, all eyes were on the wage growth data. The results were unexpectedly positive. Average hourly earnings increased to 2.9% year-over-year in August, which is the highest number since June 2009.

The number exceeded just about all estimates given by various news outlets and experts.

This impressive result could be a signal that wages are finally picking up as the demand and increased competition for talent reach all-time highs.

The increase in wage growth could also cause the Federal Reserve to raise interest rates later this month and possibly again towards the end of 2018.

U.S. Labor Market Exceeded Expectations

Another positive outcome in August was that the United States economy added more jobs than expected in the month.

Most economists and experts predicted nonfarm payrolls to grow by around 191,000 to 195,000 jobs. However, the actual number for August came in at 201,000 new jobs.

This is another sign that the economy continues to be strong, and that further growth is expected as we move towards the end of 2018.

Unemployment Rate Stayed the Same

The unemployment rate in July decreased slightly to 3.9% after it rose to 4% in June. The August unemployment came in once again at 3.9%, which is a positive outcome for the state of the labor market and United States economy.

However, broader measures of unemployment showed better results last month.

One measure of unemployment that includes discouraged workers who have stopped their search and part-time workers who seek a full-time job dropped from 7.5% to 7.4%. This number is the lowest recorded since April 2001.

Additionally, the unemployment rate for African Americans had a large decrease, going from 6.6% last month to 6.3% in August. The 6.3% is the second lowest number ever recorded, behind May’s 5.9%.

Were There Any Negatives in the August Jobs Report?

As with most Jobs Reports, there were some negative results that were released. The biggest was that job gains in June and July were lowered by 50,000. And while that makes the August increase a little less impressive, the latest Jobs Report is still overwhelmingly positive.

After another strong month for the labor market and the U.S. economy, everyone will once again be looking forward to the September Jobs Report to see if these results (especially wage growth) continue their positive trends.

We will find out in just a few weeks when the Bureau of Labor Statistics gather and release the September statistics!

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