151,000 New Jobs in August, Wages Up 2.4 Percent

The latest jobs numbers are out from the federal government. What do they mean for job seekers and employers? Here’s a quick take from Glassdoor’s Chief Economist Dr. Andrew Chamberlain: This morning’s latest jobs report revealed an economy that forged ahead in August, with 151,000 new jobs created and an unemployment rate steady at 4.9 percent. That’s slightly below economists’ expectations, but with a margin of error of +/- 115,000 jobs, that’s a solid confirmation of a healthy and growing labor market. Today’s report marks 71 consecutive months of positive job gains—an all-time record since the 1930s. Today’s numbers showed average hourly wages grew 2.4 percent from one year ago, up to an average hourly wage of $25.73 per hour. That’s below the historical norm of 3-4 percent we would typically see in a strong economy, but is well above inflation, delivering real economic gains to American workers. Other data sources—including Glassdoor salary data—show that wage growth has been slowly picking up in recent months for many job titles in the technology, healthcare, and finance industries, among others. Part of today’s slow average wage growth is due to simple churning in the job market. Many older workers at the peak of their earning years are leaving the labor force and are being replaced by younger, lower-earning workers who are just beginning their careers. That simple phenomenon helps pull down the average wage figure in the monthly jobs report. Another reason for slow wage growth is the rise in employers giving more compensation in benefits rather than wages. Despite a slow-growing U.S. economy overall, today’s jobs report strengthens the case among Fed policymakers for an interest rate hike. Interest rates have been held at historically low levels for years—an unprecedentedly aggressive monetary policy move—and today’s strong job numbers suggest it may be prudent to start returning to interest rates to normal, pre-crisis levels while times are good. August’s biggest job gains were in healthcare (+36,100), leisure and hospitality (+29,000), government (+25,000), and professional and business services (+22,000)—sectors that have led the pack in job growth consistently in recent years. By contrast, today’s report revealed that there were net job losses in mining (-4,000), construction (-6,000) and manufacturing (-14,000), continuing the trend of rough times for workers in these sectors. To speak with Dr. Andrew Chamberlain about today’s jobs report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @adchamberlain on Twitter and subscribe to Glassdoor Economic Research.