Today the Bureau of Labor Statistics reported jobs data for August 2018. Payroll jobs grew at 201,000 which means that the longest job expansion streak continues, now for 95 months. The job numbers beat expectations but we saw large negative revisions to the reports for the previous two months, bringing those months to 208,000 and 147,000. Job creation in 2018 has beaten my expectations by a lot. This has been one the best job creation years we have had in recent history– especially when one takes into account the duration of this economic expansion and our demographics. We are now less than one year away from having the longest economic expansion ever recorded in U.S. history.
At the beginning of the year, I anticipated we would create 157,000 jobs per month, at best. Year to date, we are pushing an average of 207,000 jobs per month. I don’t believe this rate of job creation can last but for now let’s enjoy how well the U.S. job market is doing in 2018.
In 2017 I wrote:
“For 2018 I am predicting monthly job creation numbers in the 157,000 – 129,000 range, which is still well above population growth, but lower than last year. With over 6,000,000 job openings in play that number should be attainable.”
https://loganmohtashami.com/2017/12/31/2018-economic-housing-predictions/
From BLS:
“Total nonfarm payroll employment increased by 201,000 in August, and the unemployment rate was unchanged at 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, health care, wholesale trade, transportation and warehousing, and
mining.”
This a breakdown of the jobs created for the last month.
BLS:
https://www.bls.gov/charts/employment-situation/employment-by-industry-monthly-changes.htm
This is a look at the earnings breakdown for the previous month.
BLS:
https://www.bls.gov/charts/employment-situation/employment-by-industry-monthly-changes.htm
Wage growth is running at 3.3% on a 3-month average and 2.9% on a 12-month average. This means that real wage growth is just a tad lower than headline CPI inflation. Wage growth is still higher than core CPI, however.
Atlanta Fed:
https://www.frbatlanta.org/chcs/labor-report-first-look/?panel=1
Doug Short:
https://www.advisorperspectives.com/dshort/updates/2018/08/10/consumer-price-index-july-headline-at-2-95
Job growth continues to outperform my expectations. We are producing over double the number of jobs needed for population growth. This is a solid reflection of our American work ethic, especially considering the duration of this economic cycle.
Today, the U6 Unemployment Rate is still below the pre-recessions lows.
From Doug Short:
https://www.advisorperspectives.com/dshort/updates/2018/09/07/july-jobs-report-201k-new-jobs-unemployment-rate-at-3-9-betterthan-forecast
Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami is a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data daily on his own facebook page https://www.facebook.com/Logan.Mohtashami