Net Job Creation by Industry through August 2016

This month as we contemplate the August job creation performance we will lead off with the thoughts of J.G. Collins managing director of the Stuyvesant Square Consultancy.

On September 2nd he wrote: The August jobs report released this morning was full of disappointment, with just 151,000 jobs created. Higher wage occupations continued to shed jobs or have just minimal jobs growth. Jobs continue to be added, though at a lower rate than prior months, to lower-wage occupations. Some of the strongest August jobs growth was in occupations that rely on government – like education, social services, and healthcare – for wage payments or supplemental support. Even higher wage sectors like financial services and professional services tend to have a number of jobs that are generated by the need for governmental and regulatory compliance. Meanwhile, higher wage private sector occupations in mining and logging, durable goods manufacturing, construction, utilities and telecommunications showed either net job losses or only modest job creation. The unemployment rate remained at 4.9 percent. The “U-6” alternative measure also remained steady at 9.7 percent. The labor participation rate remained at 62.8 percent, near a forty-year low. I wrote last month that it was highly unlikely the Fed would raise rates until December, and more likely, not until 2017 (if then.) Nevertheless, it’s clear that at the zero bound of interest rates, monetary policy is now of only diminishing marginal utility and fiscal policy, in the form of tax, regulatory, and government reform — mostly absent in the current recovery — are the only way to advance jobs and economic growth.