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US job creation cools in August as Trump hammers Fed
WASHINGTON, Sept 7, 2019 (BSS/AFP) – America’s jobs engine downshifted in
August as employers unexpectedly held back hiring across major industries,
another sign that the world’s largest economy is cooling off, government data
showed Friday.
As the numbers were released early Friday, President Donald Trump, whose
record as a job creator could pale ahead of next year’s election, renewed his
attacks on the US central bank, which he blames for failing to stimulate the
economy fast enough.
The surprisingly soft result confirmed that labor markets in 2019 have
slowed from their brisk pace last year, amid a protracted trade dispute with
China that has dragged down global commerce, fueled business uncertainty and
driven US manufacturing into recession.
Employers added a still-solid 130,000 net new positions for the month, far
lower than analyst forecasts, while the jobless rate held steady at 3.7
percent for the third month in a row, according to Labor Department
estimates.
Figures for May and June were also cut by a total of 20,000 positions,
bringing the rolling, three-month average to 156,000, well below the 241,000
seen in August last year.
The report did bring some good news, however: wages continued to rise,
suggesting consumer spending — which is almost single-handedly supporting US
economic growth — will continue.
And the share of the working-age population with a job rose to its highest
level since the depths of the Great Recession in December 2008.
“The softening in job growth should surprise no one. But it doesn’t mean
the economy is headed toward a recession right away,” economist Joel Naroff
told clients in a note.
Economists on Friday also pointed out that August numbers are frequently
revised upward in later months.
Amid weak investment by companies and mounting fears of a recession,
employers also say they are struggling to find qualified workers to fill open
positions.
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– ‘Oh, well…’ –
The slower jobs numbers should also support a Fed decision later this month
to cut interest rates, as markets widely expect it will do for the second
time this year.
Late Thursday and early Friday, Trump took to Twitter to fire off the
latest of many attacks on the US central bank, which he said had raised
interest rates too quickly last year.
“They were WAY too early to raise, and Way too late to cut — and big dose
quantitative tightening didn’t exactly help either,” said Trump, who has
advance access to the jobs report before its public release.
“Where did I find this guy Jerome?” he said, referring to Fed Chairman
Jerome Powell, whom he prompted to central bank chairman.
“Oh well, you can’t win them all!”
Speaking Friday at the University of Zurich, Powell said he and fellow
policymakers tuned out Trump’s political taunts.
But Powell welcomed the report’s figures on rising wages.
“Our labor market is in quite a strong position. For a year and a half,
we’ve been at half-century lows in unemployment,” he said.
“I think today’s labor market report is very much consistent with that
story.”
Workers got a bump in pay, as hourly wages rose 11 cents on average,
putting them up more than three percent, year-on-year, for the 13th month in
a row.
But within the August jobs details there were other causes for concern.
About a quarter of August hires came from the government itself as federal
authorities ramped up staffing to conduct next year’s census.
Private-sector employers added only 96,000 jobs in August, well below the
145,000 which economists had forecast.
In the dominant service sector, the retail, transportation and utilities
industries all shed jobs for at least the second month in a row.
Work forces also shrank in the mining sector, likely suffering from a dip
in oil prices.
Hiring was cut in half from July in the education and health industries and
was flat for auto manufacturers and information services as well as leisure
and hospitality.
Wall Street appeared unimpressed with the numbers. The Dow Jones Industrial
Average was up about 0.3 percent.
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