Another 'Weak Month' of Job Growth?
The biggest problem is that small businesses can't find enough qualified workers.
August jobs numbers came in “less than expected.” While the headline unemployment rate remained at 3.7%, just 130,000 jobs were created last month, and 28,000 of them were temporary government jobs ahead of the 2020 census. Reuters notes, “A broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, rose to 7.2% from a more than 18-year low of 7.0% in July.” It’s pretty tough to improve upon full employment, which even Reuters admitted back in 2017 when the headline unemployment rate was 4.7%.
Manufacturing in particular was weak, adding just 3,000 jobs in August. According to Reuters, “Manufacturing has ironically borne the brunt of the Trump administration’s trade war, which the White House has argued is intended to boost the sector.” That’s not wrong, but context is important.
Fighting the trade war China started is hard; it has economic costs. But which is better? Fighting dishonest and manipulative communists in Beijing, or succumbing to dishonest and manipulative socialists in America who want to fundamentally transform the U.S. economy to fight climate change — while the Chinese, in their pollution-spewing factories, laugh all the way to the bank?
Meanwhile, CNBC reports, “Labor force participation also increased, rising to 63.2% and tying its highest level since August 2013. The total number of Americans considered employed surged by 590,000 to a record 157.9 million.” Wages are up a healthy 3.2% for the year, which continues to drive consumer spending.
A final note of explanation for slower job growth. Small businesses, which account for the vast majority of jobs and economic growth, are still hiring, but they’re having trouble finding workers. William Dunkelberg, chief economist for the National Federation of Independent Business, says of the historically tight job market among small businesses, “If any of the widely discussed ‘slowdown’ occurs, a significant contributor will be the unavailability of labor.” He indicates, “Sixty-four percent [of business owners] reported hiring or trying to hire (up 1 point), but 57 percent (89 percent of those hiring or trying to hire) reported few or no ‘qualified’ applicants for the positions they were trying to fill. A record 27 percent of all owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem, a clear indication that a shortage of qualified workers is slowing growth.”
All in all, says Dunkelberg, it’s “hard to call it a ‘recession’ when job openings still exceed job searchers.” That doesn’t mean Democrats and the Leftmedia won’t keep trying.