The numbers did not meet expectations
The August jobs report from the Labor Department showed that growth underperformed expectations, indicating that the trade war with China and the resulting tariffs are negatively impacting some industries.
While the unemployment rate remained low at 3.7 percent, and overall labor force participation rose to 63.2 percent, the economy only added 130,000 jobs, well below the 164,000 that was widely projected.
Of those 130,000, only 96,000 were in the private sector, and 25,000 of the new workers were temporary positions hired to conduct the 2020 census.
The Labor Department’s numbers are particularly disappointing when contrasted with an ADP Research Institute projection from Thursday that claimed the economy had added 195,000 private sector jobs, apparently leading President Donald Trump to tweet about “Really good job numbers!”
Really Good Jobs Numbers!
— Donald J. Trump (@realDonaldTrump) September 5, 2019
Revisions to previous months’ jobs numbers dragged the year’s monthly average down even further. June’s growth was revised down by 5,000 jobs, and July’s was revised down by 15,000. 2019’s monthly job increase average is 158,000 new jobs per month. In 2018, the average monthly gain was 223,000 per month.
Growth is particularly slow or nonexistent in the construction, transportation, manufacturing, and warehousing industries, which some analysts attribute partially to the trade war with China.
Chinese tariffs on American goods have hurt U.S. exports, and businesses are hesitant to spend, invest, and expand given uncertainty about how long the trade war will continue.
The news is not all bad, however. Unemployment remains at record lows, average hourly pay is up from a year ago, and consumer spending was up from April through June.
President Trump blames the Federal Reserve for slowing economic growth, and slammed the Fed chair Jerome Powell, a Trump appointee, on Twitter.
“I agree with @jimcramer, the Fed should lower rates,” Trump wrote. “They were WAY too early to raise, and Way too late to cut – and big dose quantitative tightening didn’t exactly help either. Where did I find this guy Jerome? Oh well, you can’t win them all!”
I agree with @jimcramer, the Fed should lower rates. They were WAY too early to raise, and Way too late to cut – and big dose quantitative tightening didn’t exactly help either. Where did I find this guy Jerome? Oh well, you can’t win them all!
— Donald J. Trump (@realDonaldTrump) September 6, 2019
Author: Aaron Colen