The labor market is laboring to add jobs again
Some companies are hiring, but it's not very easy to find a good job.
Is the U.S. economy enduring a summer hiring slump for the third year in a row? Wall Street expects only a small increase in new jobs in August, but the news probably won't be all bad.
Here's how to read the critical monthly employment report due Friday. One wild card: The hundreds of thousands of Haitian immigrants who have lost the temporary protective status that allowed them to stay in the United States.
Jobs forecast
The economy probably added a net 53,000 new jobs in August, according to economists polled by the Wall Street Journal. That's jobs created minus jobs destroyed.
Any increase would improve upon the preliminary 23,000 decline in employment in July, which was the first negative reading in five months.
Still, the economy is on track to show a downswing in summer hiring for the third year in a row.
How believable is that? Some economists say not very.
They contend that the government statisticians who compile the jobs report haven't caught up yet with postpandemic shifts in seasonal employment patterns. They don't think the labor market is is suffering a hiccup every summer.
Even if they are right, other labor-market indicators also point to a summer slowdown in hiring.
The giant payroll processor ADP, for instance, said that in August, private-sector businesses added the fewest new jobs in seven months: just 38,000.
ADP manages the distribution of paychecks for more than 25 million employees at companies around the country.
Unemployment rate
The economy used to need to add 150,000 to 200,000 jobs a month to keep the unemployment rate from rising. Not any longer.
Now the U.S. needs to add only 50,000 jobs a month to keep unemployment down.
Home come? The working-age population is no longer growing - and it might even be shrinking. The birth rate is low. Legal immigration is frozen. Unauthorized immigrants are being removed. And more than 10,000 baby boomers retire every day.
The U.S. unemployment rate fell to 4.1% in July to match a one-year low.
Economists predict the jobless rate will be unchanged in August. Layoffs last month were near the lowest level since the late 1960s, reflecting the reluctance of companies to reduce staff at a time when good help is hard to find.
Fewer people look for work
The low unemployment rate, however, masks a deeper problem. The jobless rate has fallen to 4.1% from 4.4% this year largely because more than 1 million people have left the labor force.
In other words, these people are no longer looking for a work.
That's not a good sign for the labor market. People stop looking for work when jobs become harder to find or the pay isn't all that great.
In July, the share of the working-age people who either had a job or were looking for one fell to a postpandemic low of 61.4%.
The last time it was that low was in 1976.
If there is a silver lining, the participation rate of workers in their prime - ages 25 to 54 - was much higher in July and not far from an all-time high.
Haitian refugees
More than 300,000 Haitian refugees living in the U.S. lost temporary protective status in July and are subject to deportation. The change in their legal status has made it risky for businesses to keep them on payroll.
Some economists say the August employment report could be depressed if large numbers of Haitian workers are no longer at their jobs.
"Immigration policy changes likely held back payrolls growth in August," said Bill Adams, chief economist at Fifth Third Commercial Bank.
Keep an eye on employment in healthcare and hospitality - mainly hotels and restaurants. Many Haitians work in these parts of the economy, which have also been responsible for adding most of the new jobs in the U.S.
-Jeffry Bartash
Comments