Unemployment rates have increased over the last month by 3.7%. This is largely due to more people becoming unemployed than in previous months.
The jobs gains are slowing, even though the labor market is a strength for the economy. The Federal Reserve will take action should inflation worsen.
The professional and business services industry saw the strongest gains as they added 68,000 jobs in August. The hiring surge left the industry with an unemployment rate of 3.2 per cent – a point lower than its pre-pandemic number of 3.3 per cent. Computer systems design led the hiring spree by adding 45,200 new positions, the occupation having taken charge of US growth since 2009.
The healthcare industry creates 48,000 jobs, with notable improvement in the number of physicians and nursing care facilities. The retail trade made 44,000 jobs more available and manufacturing continued to tick up by 22,000 jobs.
Unemployment in the leisure and hospitality industry remained unchanged at its low of 90,000 jobs in the first seven months of 2022. The leisure and hospitality industry is still 7% below pre-pandemic levels.
The economy has recovered 20 million of the jobs lost during the pandemic. Our real-time measure of economic output and low levels of inflation suggest a less rosy picture may lay ahead.
Many economists are warning that with the mixed messages from the economy, workers will eventually face a harder job market. Incomes have risen but not as much as inflation so workers are struggling while paychecks haven’t kept up with inflation.
Wages have increased by 5.2% over the last year, which is an increase of 0.3%.
The labor participation rate went up 0.3% in August from 62.4% to 62.7%, a sign that more Americans are seeking employment. Many are finding jobs, with the unemployment rate going down to 9%. Although this is below February 2020 levels of 5.2%, employers are frustrated by the severe shortage of labor they face.
Daniel Zhao, Lead Economist at Glassdoor, said that in the short term the US economy is slowing down even though job growth has been strong. He believes that eventually the labor market will decrease but for now it is a promising area.