GREAT AGAIN: August Jobs SURGE, +201K, Unemployment at 3.9%

August Jobs Report: Economy Adds 201,000 Jobs; 3.9 Percent Unemployment

August Jobs Report: Economy Adds 201,000 Jobs; 3.9 Percent Unemployment

Friday's August jobs report from the government also showed that paychecks are growing faster.

Global outplacement firm Challenger, Gray & Christmas said on Thursday there were 521 tariff-related job cuts in August, but these were largely offset by the hiring of 359 workers by steel producers. There were also gains in transportation and healthcare employment.

In August, factories expanded at their quickest pace in 14 years, according to a survey of purchasing managers. Goldman Sachs reckons the measurement glitch reduced last month's job count by at least 40,000.

Service providers increased payrolls by 178,000 workers, a three-month high.

Government employment fell 3,000 last month.

The United States and China have slapped retaliatory tariffs on a combined $100 billion of products since early July. The annual gain followed a 2.7% advance in July.

Following Friday's report stock futures were lower and Treasury yields higher as investors see this report as indicating a more inflationary economic environment, one that is unlikely to see the Fed change its plans to raise rates two more times this year.

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Wage growth has been the labor market's Achilles heel and last month's increase fit in with economists' expectations that inflation will continue to bounce around the Fed's 2 percent target for the remainder of this year and into early 2019. Wholesalers added 22,400 jobs.

Manufacturers cut 3,000 jobs last month, the first time they have cut jobs in about a year.

A wider measure of unemployment - that includes discouraged workers who have given up their job searches and part-time employees who prefer full-time positions - dropped from 7.5% to 7.4%, lowest since April 2001.

Interestingly, the pay gains are not especially strong in areas where employers have been complaining about labor shortages.

But a broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they can not find full-time employment, fell one-tenth of percentage point to 7.4%, the lowest level since April 2001.

Another measure showed diminishing labor-market slack. What was initially estimated as a payroll increase of 157,000 for July was revised downward 10,000. But monthly additions are still averaging a muscular 207,000 this year. "However, given that jobs added are still above 200,000, showing many more Americans want to work, and wages have started to increase about the 2.7% level, we could be entering that sweet spot for workers that's typical at an expansion's peak".

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