“If all economists were laid end to end, they would not reach a conclusion.” – George Bernard Shaw, playwright
Predicting the future can be tricky. Just ask an economist.
Economists have frequently been off this year when it comes to predicting the number of jobs created in a given month, sometimes dramatically. They were off again in August, too, but this time they overshot the actual number whereas in recent months their tendency has been to undershoot.
Prior to the Labor Department’s monthly unemployment report Friday, economists estimated the number of new jobs to be 170,000, which would have been a month-over-month decline of nearly 40,000. The number came in slightly below that at 156,000, which was disheartening for some, considering the robust job growth seen earlier in the summer.
But such a discrepancy is not unusual for this time of year, observed Jeffrey Bartash for MarketWatch.
“The preliminary estimate in late summer is often low,” Bartash wrote, “because so many people the government surveys are on vacation and don’t respond right away.”
The unemployment rate went up 0.1%, from 4.3% to 4.4%, and job gains for June and July were revised downward by 41,000.
Fletcher Wimbush, CEO of California-based The Hire Talent, a talent assessment company, and Wimbush & Associates, a talent search firm, characterized the figures as “more of the same.”
“For the past four years,” he said, “we have had steady, consistent, just mediocre growth. Wage growth has been lackluster although it’s picking up.”
Francisco Ojeda of Tamarac, Florida, an unemployed 27-year veteran of the Florida Army National Guard, said the jobless numbers reflect “a stabilization issue.”
“The summer months are coming to a close,” he said. “Summer employment is going away, and students are back in school. I would like to think that the next report will be indicative of older nonstudents getting employment.”
John Engle, president of Illinois-based Almington Capital, said the numbers were “disappointing, given the recent run of positive indicators and an ADP/Moody's report showing an August surge in private-sector hiring. However, a slight uptick in unemployment is likely not a harbinger of a reversal of economic fortunes.”
Bloomberg identified which industries had the highest and lowest levels of employment growth.
Support activities for mining led the list with nearly 7,000 jobs created in August. The mining industry boasted a current hourly wage of $28.47, which is more than $1 higher than the average hourly pay for American workers in general.
The sluggish nature of wage growth has been frustrating for many.
“Employers are not willing to pay higher wages to candidates who lack the skills and experience needed to show high potential,” Wimbush said. “We need to start looking at candidates’ soft skills and potential and be willing to pay more and train on the job as employers if we are going to make any new hires.
“Additionally we need job readiness programs to get workers into higher paying advance manufacturing jobs, logistics, health care and other hot industries. Our early education system needs to do a better job of preparing young people to enter the workforce with skills and experiences that command higher wages.”
Engle said he considers the workforce participation rate to be “an equally, if not more, important indicator of long-term economic participation, and it’s holding steady after a run of increases further demonstrates that there is still a lot to be done to improve our growth prospects.
“A 0.1% rise in August does not change the overall positive trend that has seen unemployment fall over the past year to lows not seen in several years,” Engle said. “But it is a welcome reminder that sustained improvement is not guaranteed, and that political and economic uncertainty threaten to undermine hopes for a new era of more rapid economic expansion.”
