Magazine article Economic Trends

Labor Markets

Magazine article Economic Trends

Labor Markets

Article excerpt

Nonfarm payrolls increased by 128,000 in August, a number identical to the three-month average of 128,000. Service-producing industries drove the increase, adding 118,000 jobs. Health and education services accounted for almost half of the increase (60,000), largely from an addition of 34,800 jobs in health care. Manufacturing's job losses lessened from -24,000 in July to -11,000 in August, contributing to the overall improvement in employment. The biggest drag on employment was retail trade, which decreased by 13,500 jobs. Temporary help services, often considered an indicator of the labor market's future condition, continues to show little or no growth.

This steady growth is boosting employment by just over 1% per year. Because the U.S. population is also increasing by just over 71% annually, this growth absorbs new workers as long as the participation rate stays fixed.

Indeed, the civilian unemployment rate was essentially unchanged (creeping from 4.8% to 4.7%), and the labor force participation rate held at 66.2%. The employment-t0-population ratio remained almost unchanged at 63.1%.

Labor participation rotes have been stable recently but there have been some important shifts within demographic groups. Young men and women have both been participating at significantly lower rates since the 2001 recession. In contrast, older workers of both sexes have increased their labor force participation. The future path of these supply trends will be an important determinant of how much employment growth will occur from month to month. …

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