The economy added 156,000 new jobs and unemployment rose a tenth of a percentage point to 4.4 percent in August, the Bureau of Labor Statistics announced Friday in a jobs report that fell slightly short of expectations but nevertheless signaled that the lengthy employment recovery continues to barrel on.
Not only did the month's job growth fall short of the estimated 180,000, employers added 41,000 fewer jobs combined in June and July than previously estimated, according to Friday's report. Altogether, the report lacked the arresting headline numbers of past months' reports that President Trump has touted. In an additional disappointment, annual wage growth failed to accelerate beyond its recent pace, and remained stuck at 2.5 percent.
Yet, taking a broader view, the report had plenty of good news for workers. Even though the rate of job creation fell off in August, recent gains have been more than strong enough to keep unemployment trending down. The expectation of falling unemployment will provide reassurance to Federal Reserve officials that they are justified in their plans for withdrawing monetary stimulus later this year.
At the start of the year, "you would have said: 'Those are great numbers, that would be a great acommplishment by Labor Day,'" White House economic adviser Gary Cohn said of the jobs and economic growth numbers Friday morning on Bloomberg. "Well, we're there."
Only around 50,000 to 100,000 new jobs are needed each month to keep the unemployment rate steady or falling. The country easily cleared that hurdle in the past three months, with average growth of 185,000, even with the unemployment rate near the lowest it has been since the dot-com bubble.
Not that the economy is yet as healthy as it was back then. In particular, many more people today are out of the workforce entirely.
Mostly, that's because of long-running demographic changes reshaping the population, such as the retirement of the Baby Boom generation. Some part of the decline in workforce participation, though -- and just how much is a matter of contention among economists -- can be blamed on the years of job scarcity that led some people to quit the job hunt altogether. Labor force participation plummeted in the wake of the recession, then stabilized just under 63 percent in late 2013. It stood steady at 62.9 percent in August, according to the household survey.
For people in their prime working years, between the ages of 25-54, overall rates of employment have steadily crept up in recent months to where they were prior to the crisis.
Younger people, though, have yet to regain their pre-recession rates of work.
"That's really showing where the slack is -- how many more people there might be waiting on the sidelines because they haven't found it to be a favorable labor market or jobs market, and how many more might be coming in if wages are going up," said Cathy Barrera, chief economic adviser for the job posting service ZipRecruiter. "
In some parts of the country, the labor market is red hot.
With job openings hitting a record high in the summer, and the rolls of unemployment insurance beneficiaries the smallest they've been in 44 years, employers have increasingly complained about difficulties finding people to hire.
In Boulder, Colorado, local media reported in August that a moving company was forced to hire a recruiter to find movers and drivers, jobs that usually can be filled using Craigslist. Unemployment stood at a rock-bottom 2.2 percent in the state in July.
In Columbus, in the heart of Ohio, one construction executive said the increasingly difficult search for workers had forced him to look outside the state. Unemployment in the city was roughly the same as it is nationally at last count.
The view from the Fed is that, at some point, employers forcing a scarcity of labor will have to offer better pay to entice people to work for them, leading to an acceleration in wage growth. Over the past few years, wage growth had been steady but relatively low. In fact, there are already possible signs of that dynamic taking hold, with wages growing more for low-skilled workers than for high earners in recent months.
Fed officials would like to see more of it. For companies to complain about difficulties facing workers without offering higher wages "just sounds like whining," Federal Reserve Bank of Minneapolis president Neel Kashkari said in August.
In one sense, it's disappointing that wage acceleration has fallen short of expectations even as unemployment has cratered. In another, though, it's encouraging because it suggests that the economy might be capable of creating many more jobs and putting many more people to work before employers start being pinched by wage pressures and the Fed is forced to respond with higher unemployment rates to tamp down inflation.
The relatively slow wage growth "leads us to think that maybe there's a little more slack than that unemployment rate is indicating," said Barrera.
Another encouraging sign in Friday's establishment survey was that the country continues to add manufacturing jobs. Manufacturing employment grew by 36,000 in August, and the sector has added 155,000 positions since November. The health care and construction industries also contributed to the month's growth.
One fact that did not affect Friday's report was the devastation wrought by Hurricane Harvey in Houston and the Gulf Coast. The surveys that make up the jobs report were conducted before the storm struck.
September's jobs report, on the other hand, is likely to be weaker because of all the businesses shut down by the hurricane and flooding.