On Friday, we received the latest update on the health of the economy from the U.S. Bureau of Labor Statistics. According to the report, the economy added 130,000 jobs in August, which marked the 107th consecutive month of job growth, and the unemployment rate held steady at 3.7% near its lowest level in almost 50 years. Here are some key takeaways:
1. Job growth has slowed, but remains healthy
Even with the boost from 25,000 new government jobs for Census workers, the pace of job creation has noticeably slowed. On average, the economy has now added 158,000 jobs per month in 2019–fewer than in each of the last eight years, but more than enough to maintain the historically low unemployment rate and absorb new labor market entrants.
2. Black unemployment has fallen to a record low
Unemployment fell to 5.5% for blacks, the lowest rate on record. The gap between black and white unemployment (3.4%) is now the narrowest on record. (Black unemployment peaked at 16.8% following the Great Recession, versus 9.2% for whites.)
3. Four out of five working-age people are now employed
The prime-age employment-to-population ratio rose to 80%, its highest level since January 2008, after trending downwards in recent months. In a tight labor market, employers are improving working conditions and broadening recruitment efforts to expand the pool of workers. Many more people are responding by jumping into the workforce for the first time, or by venturing back after becoming detached from the labor market during the recession. That has been a surprise to some observers who thought that we were already at full employment way back in 2015.
4. The fracking job boom appears to be over
A major engine of recent job creation, from Texas and North Dakota to Ohio and Pennsylvania, is running out of steam. Two of the fastest-growing categories of jobs over the past two years have been oil and gas pipeline construction (with employment growth of 15.6% in 2017 and 30.5% in 2018) and support activities for oil and gas operations (with employment growth of 19.9% in 2017 and 17.1% in 2018). The former has now lost 17,000 jobs and the latter 9,500 in just the past six months.
5. E-commerce-related job growth more than offset retail losses, until now
The “retail apocalypse” that began in 2017 is accelerating. But this year, for the first time, job losses in retail are no longer being fully offset by gains in transportation and warehousing. When the retail sector lost 87,900 jobs in 2017, the transportation and warehousing sector added more than twice as many (185,900). Then, in 2018, retail employment picked up by 14,000 jobs, while transportation and warehousing employment surged by 216,100. This year has been different. Retailers have already lost 74,400 jobs and it’s only September. Meanwhile, job growth in transportation and warehousing has slowed considerably, with the sector only adding 51,800 jobs.