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August Jobs Report - Quite Good, Except For One Thing


  • The jobs report beat expectations by posting a headline number of 201k against expectations of 191k.
  • Average hourly earnings increased by more than expectations, lending some support to the narrative about the tight labor market.
  • We continue to see job creation in relatively high-paying sectors of the economy, which is certainly a good thing.
  • Involuntary part-time workers are now at the lowest level with 2007, which is also a very good sign when it comes to job creation.
  • The labor force participation rate actually declined month over month, which is a drag on the economy and casts some doubt on the official numbers.
  • Members of our private investing community, Energy Profits in Dividends, get our best ideas and insights. Get started today >>

It is hard to believe that another month has passed since my last analysis of a BLS jobs report, but alas, here we are. On Friday morning, the Bureau of Labor Statistics released the August 2018 Employment Situation Summary. The actual numbers certainly surprised economists, with payrolls coming in at 201k against expectations of 191k and average hourly earnings rising by 0.4% month over month against expectations of 0.2%. While we are certainly seeing some signals that the U.S. economy has indeed been improving in what is now the second-longest economic expansion since the Great Depression, everything is certainly not perfect here. It was overall a good report though.

As just mentioned, total nonfarm payroll employment increased by 201,000 in August 2008, which beat expectations of 191,000. While this was certainly a good number, it was far from the best one that we have seen during the current economic expansion.

(Source: Zero Hedge)

As is often the case though, the Bureau of Labor Statistics was forced to revise the job prints for the months of June and July downward. The month of June was changed from 248,000 to 208,000 and the month of July was changed from 157,000 to 147,000. The net result of these changes was to reduce the number of jobs created in the last two months by 50,000 compared to what was previously reported. I must admit, sometimes I wonder if the BLS deliberately overcounts the job numbers, only to revise them downward after people have stopped paying attention. Such a practice would make the economy look better than it really is, as media headlines and the like typically only focus on the official numbers from the most recent month.

For the overwhelming majority of the current economic recovery, the bulk of the jobs created were relatively low-wage

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