PeopleScout Jobs Report Analysis—August 2022

PeopleScout Jobs Report Analysis—August 2022

U.S. employers added 315,000 jobs in August. This came in slightly below analyst expectations. The unemployment rate rose to 3.7% as more workers entered the labor force. Year-over-year wage growth remained high at 5.2%.

The Numbers

315,000: U.S. employers added 315,000 jobs in August.

3.7%: The unemployment rate rose to 3.7%.

5.2%: Wages rose 5.2% over the past year.

The Good

Though job growth cooled slightly from July, the 315,000 jobs added to the economy are good news. As CNBC reports, August’s jobs report demonstrates that employers are continuing to hire and suggests that the Federal Reserve could avert a recession.

The increased unemployment rate is also good news for economists because the month-over-month 0.2% increase is paired with a 0.3% increase in the labor force participation rate. This means that the economy is strong enough to bring in more workers who were sidelined earlier in the pandemic.

The Bad

Despite the strength of August’s report, experts still spot a few areas of concern. As the Wall Street Journal reports, some minority groups saw either increased unemployment or decreased labor force participation. Fewer Black adults were working or seeking a job in August.

Additionally, some experts believe job growth could continue to cool as the U.S. economy has now recovered all of the jobs lost in the early days of the coronavirus pandemic. This means that rehiring will likely be less of a factor in future jobs reports.  

The Unknown

Economists will continue to watch how the economy responds to rate increases by the Federal Reserve. As the New York Times reports, policy-makers at the Federal Reserve believe that the job market is overheated. There are currently twice as many jobs open as there are job seekers, which is driving up prices and contributing to inflation. The hope is that by raising rates, they will be able to cool inflation and slow job growth without allowing unemployment to skyrocket.

Post by Nicole Fuqua