More Americans held full-time jobs in August than ever before, the Labor Department reported Friday.
The headline numbers from monthly jobs report showed the economy adding 173,000 payroll jobs, short of expectations, and the unemployment rate falling from 5.3 percent to 5.1 percent.
The release also reported that the number of people working full-time rose to 122,024,000, according to the household survey, eclipsing the previous peak of 121,875,000 reached in November of 2007 just before the recession began.
Returning to that milestone more than half a decade later marks how far the economic recovery has come and also how slow it has been for many Americans.
While the headline job creation number fell short of expectations, other details in Friday’s report gave more positive signs of labor market health in August.
Revisions to the previous two months’ data improved the picture of recent growth by adding 44,000 jobs.
Over the past three months, job gains have averaged 221,000, in line with the trend over the year.
Growing employment in the household survey helped to push unemployment down to the lowest level since April of 2008.
The unemployment decline was also driven by one of the weak spots in the report, namely a slight decrease in the size of the labor force. The labor force participation rate, at 62.6 percent, remained at the lowest level it has been since the late 1970s.
It is likely that Friday’s results will later be revised upward and ultimately look better. The monthly payrolls survey has a wide margin of error and is subject to revision in the months ahead. Initial reports for August, in particular, have tended to understate job creation. August job growth has missed expectations in 21 out of the past 27 years, according to Deutsche Bank economists. Upward revisions have averaged 79,000 over the past five years, according to Goldman Sachs.
Friday’s numbers were highly anticipated for the possibility of numbers that might sway Federal Reserve officials as they debate whether to raise interest rates at their September meeting.
Previously, investors expected the Fed to raise rates from zero for the first time since the recession. But recent volatility in stock markets and concerns about the effects of slowing Chinese growth on the U.S. have thrown the outcome of the monetary policy meeting into doubt.
Friday’s report “probably puts the Fed to rest for September. They’re probably not going to hike rates based on this,” said John Canally, chief economic strategist for LPL Financial.
A report with 200,000 to 250,000 new jobs, he said, would have been a “Goldilocks” report: Not strong enough to guarantee a rate hike that could spook investors, but also not so weak that it raised concerns about China’s impact on the U.S. “This one’s got a little bit of China spillover fears in it,” he said.
Average hourly earnings recorded in the survey rose by 2.2 percent, mostly in line with gains in recent years. Fed officials have said they’re watching wage growth for signs of tightening in the labor market. Even with relatively slow wage gains in recent months, consumers have benefited as falling oil prices have driven down the cost of living, creating greater real income growth.
