Hiring has slowed down, but employers are still adding jobs and wages are rising
SCOTT SIMON, HOST:
It's been a hot summer, but the job market continues to cool. U.S. Labor Department says employers added 187,000 jobs last month. Job gains for June and July were also revised lower. The Federal Reserve has been trying to cool the economy as it raises interest rates to try to curb inflation. NPR's Scott Horsley joins us. Scott, thanks so much for being with us.
SCOTT HORSLEY, BYLINE: Good to be with you, Scott.
SIMON: So how much has hiring gone down?
HORSLEY: Yeah. These numbers bounce around a lot from month to month. But if you average out the whole summer, employers added about 150,000 jobs each month in June, July and August. That's less than half the pace of job growth we saw in the first three months of the year. So there has been a slowdown, which is not surprising. Employers are no longer playing catch-up for jobs that were lost in the pandemic. They're just adding workers as they need them. We do continue to see hiring in health care and hospitality and construction. Construction companies added about 22,000 workers, despite the jump in mortgage rates. Most of those new construction workers are not building houses, though. They're working on commercial buildings or big public works projects.
SIMON: And the unemployment rate rose last month from 3.5% to 3.8%. Does this worry economists?
HORSLEY: Not really. The unemployment rate comes from a separate survey of households. And what it showed in August was that more than 700,000 people started looking for work last month. Not all of them found jobs right away. So the unemployment rate inched up, but it's still under 4%, where it's been for more than a year and a half. Speaking in the White House Rose Garden yesterday, President Biden cheered the fact that so many people are now in the workforce.
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PRESIDENT JOE BIDEN: People are coming off the sidelines, getting back to their workplaces. Job satisfaction is higher than it's been in 36 years.
HORSLEY: And the share of working-age people who are in the job market is now the highest it's been since 2002.
SIMON: And Scott, the extra paychecks ought to enhance the broader economy, right?
HORSLEY: They certainly help. You know, more people are working, and they're earning more money. Average wages in August were up 4.3% from a year ago, which should be enough to outpace inflation. All those paychecks do help to keep the consumer engine going. But there is some question how long we can keep revving that engine. Earlier this week, the Commerce Department reported that personal spending grew four times as fast in July as personal income did. Nancy Vanden Houten, who's with Oxford Economics, says that can't go on indefinitely.
NANCY VANDEN HOUTEN: There are a lot of reasons to believe that the consumer is going to run out of steam. Savings are being depleted. I think it's going to be harder for some households to continue to borrow. And then we have the wild card at the end of student loan forbearance coming, and I think that will eat into consumer spending a bit, as well.
HORSLEY: Those student loan repayments start up next month. And if people do dial back their spending, we could certainly see a further slowdown in job growth.
SIMON: Of course, on Labor Day weekend, we have to ask about organized labor. And I want to ask you specifically - the strike by Hollywood actors and writers had a cameo in this month's job report, didn't it?
HORSLEY: That's right. The motion picture business lost about 17,000 jobs last month, which the Labor Department attributes to the writers and actors strike. The auto workers union has also authorized a strike against the big three carmakers when their contract expires later this month. If that comes to pass, you could see a much bigger loss of jobs, although it probably wouldn't show up until later in the fall. Unions do feel like they're in a strong bargaining position. They've won some big gains at UPS and the airlines. Of course, 9 out of 10 workers in the U.S. is not in a union. And for them, their best leverage is a strong job market.
SIMON: NPR's Scott Horsley, thanks so much.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.