Today’s jobs report shows that the economy added 315,000 jobs in August, for an average monthly gain of 378,000 over the past three months. The number of jobs added in August came in around market expectations. Employment in June and July was revised down by a combined 107,000 jobs.
The unemployment rate rose to 3.7 percent, with growth in the labor force (which includes the unemployed) outpacing growth in employment. Labor force participation rose to 62.4 percent, reversing the declines seen in the last few months. Nominal wages have risen by 5.2 percent over the last year, it has held steady around this rate for the last three months.
1. Average monthly job growth over the last three months was 378,000, a fast pace, but a slowdown from average job growth in the winter.
Job growth in June, July, and August averaged 378,000 jobs per month (Figure 1). Since monthly numbers can be volatile and subject to revision, the Council of Economic Advisers prefers to focus on the three-month average rather than the data in a single month, as described in a prior CEA blog.
2. Monthly wage growth has largely been stable in recent months.
Nominal average hourly earnings rose 0.3 percent over the month. Wage growth is still high relative to pre-pandemic, but it is lower than at the end of 2021 and has largely been stable in recent months (Figure 2). Adjusted for inflation, recent wage growth has been negative.
3. Labor force participation rose, reversing the declines seen in the last few months. Prime-age (25 to 54) participation also rose and neared its pre-pandemic level.
Labor force participation had a relatively large increase to 62.4 percent, reversing the declines seen in the last few months. Prime-age participation also rose and is now only 0.2 percentage point below its pre-pandemic level. Overall, the recovery in labor force participation has been relatively strong in this recovery compared to past recoveries.
Labor force participation for prime-age women has now fully recovered to its February 2020 level. Participation for prime-age men also saw an increase in August, but their recovery has lagged that of women despite the fact that women’s participation was initially hit harder by the pandemic than men’s.
As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and payroll employment estimates can be subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, and it is informative to consider each report in the context of other data as they become available.