What employers need to know about the August jobs report
The U.S. Bureau of Labor Statistics released its monthly jobs report, revealing how the summer panned out for businesses and workers alike. According to the report, the economy finished out the summer to the tune of 130,000 jobs. Meanwhile, the unemployment rate held at 3.7% for the third consecutive month, and average hourly wages increased by 11 cents, totaling $28.11. Here are the headlines from August’s report.
1. Hiring Cools in August
Economic expansion has been slower this year than in 2018, and the August jobs report from the BLS was a testament to the snail-like growth. Falling short of Wall Street estimates of about 150,000, the labor market added 130,000 jobs in August. This comes after payroll processor ADP reported a strong 195,000 jobs were added to the private sector in August. “August is often a strange report anyway because you have people rolling off from summer work,” JJ Kinahan, TD Ameritrade’s chief market strategist, told the Wall Street Journal. “The market’s having a pretty muted reaction overall because it’s a month where it’s sometimes hard to read.” As with any jobs report, the numbers tend to fluctuate each month, so one weak report isn’t cause to worry. With back-to-school season in full swing and uncertainty surrounding trade tensions and the stock market, many businesses likely put hiring on pause for the month.
Nonetheless, it is important to note that the economy is experiencing a slowdown. The report also showed that hiring in June was revised down to 178,000 (from 193,000), while July’s job numbers decreased to 159,000 (from 164,000). In addition, the BLS released employment and occupation projections for 2018-202 earlier this week. During this 10-year time frame, employment is expected to grow at an annual rate of 0.5%, slower than the annual rate of 0.8% from 2008-2018.
2. Health Care is on the Rise
Employment in the health care sector increased by 24,000 jobs in August. The most job gains were seen in ambulatory health care services (+12,000) and hospitals (+9,000). As a whole, the sector has grown by 392,000 jobs over the past 12 months. Looking ahead through 2028, the BLS says health care will command the labor market, experiencing the fastest annual employment growth rate of 1.6%. The fastest-growing jobs in health care will be home health aides, personal care assistants, occupational therapy assistants, physician assistants, and nurse practitioners. As more jobs are needed in this sector, it will be important for health care employers to get creative with hiring (but we’ll get to that in a bit).
3. Retail Brick-and-Mortar Loses Jobs to Ecommerce
According to the BLS report, employment in retail trade declined by 11,000. General merchandise stores lost 15,000 jobs over the month, which was partially offset by a small gain of 9,000 jobs at building material and garden supply stores. Over the year, general merchandise stores have lost 80,000 jobs. Looking ahead, the BLS projects employment in the retail trade sector to decline by 0.1% annually, resulting in an employment decrease of 153,700 jobs. A major factor contributing to this decline is the rise of ecommerce. According to the U.S. Department of Commerce, ecommerce sales represented more than half of all retail sales growth last year. Employers should look to transition in-store merchandisers, cashiers, and managers to positions in customer service, digital marketing, warehousing, and transportation as they shift to web-focused business models.
4. Employers are Attracting More Workers to Job Market
The number of people looking for—and finding jobs—has increased this summer. Over the past three months, workforce participation increased to 63.2% in August. The New York Times reports that in recent months, nearly 75% of people who have become newly employed have come from outside the labor force and the number of workers is now the highest since 2008. With the unemployment rate holding at a near-50-year-low of 3.7% for the third consecutive month and industries like health care growing at a rapid rate, it’s important for employers to continue to coax more people into the job market. This means, employers may need to be more lenient with job requirements, such as offering flexible hours and work-from-home options to attract stay-at-home parents and full-time students, making the necessary accommodations to open up jobs to people with disabilities, or dropping educational requirements and offering training to workers who lack the necessary skills.
5. Wage Growth is on the Rise
Perhaps the sunniest part of the BLS jobs report was the spike in wages last month. Wage growth is a sign of a strong economy, and this growth far exceeded expectations last month. According to the report, average hourly wages rose by 11 cents in August for a total of $28.11. Over the summer, wages increased by 27 cents, and 3.2% over the past 12 months. While wage growth hasn’t reached February’s peak of 3.4%, this strong growth should give employers hope as they strive to attract quality candidates.
The next jobs report will be released on October 4, 2019, at 8:30 a.m. EST. In the meantime, see how Monster can help drive job growth at your organization