Higher than Expected Job Growth and Wage Gains in August Signal Economic Strength

President Donald Trump speaks at a rally at the Rimrock Auto Arena in Billings, Mont., Thursday, Sept. 6, 2018.
AP Photo/Jim Urquhart

The American economy added  201,000 jobs in August and the unemployment rate held steady at 3.9 percent.

Economists had forecast 191,100 new jobs and the unemployment rate falling to 3.8 percent.
Average hourly earnings increased 2.9 percent for the month on an annualized basis, according to a Department of Labor report released Friday. That also beat expectations for 2.7 percent wage growth. In dollar terms, average hourly earnings increased 10 cents from the previous month to $27.16.
Private sector payrolls rose by 204,000. Mining added 6,000 new jobs. Construction added 23,000, bringing its total to over 300,000 for the year.
Manufacturing lost 3,000 jobs, which is surprising given other signs of strength in the manufacturing sector.
The reports for the two previous months were revised lower. June’s jobs numbers fell from 248,000 to 208,000, while July’s declined from 157,000 to 147,000 in July. After revisions,  the economy has seen average monthly gains of 196,000 jobs over the past 12 months.
The broadest measure of unemployment, which included discouraged workers and those at jobs part-time for economic reasons, fell to 7.4 percent from 7.5 percent.
The stronger than expected jobs number is particularly notable because August has produced disappointing jobs numbers in recent years. Job creation came in below expectations in August 0f 2017, 2016, and 2015.
The bigger than expected wage numbers may weigh on the stock market Friday as investors are likely to think it will encourage the Federal Reserve to increase the pace of interest rate hikes  U.S. stock index futures fell in pre-market trading Friday morning after the release of the jobs report.


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