UNITED STATES NEWS

US jobs report for August could point to a moderating pace of hiring as economy gradually slows

Aug 31, 2023, 7:54 PM

WASHINGTON (AP) — Slowly and steadily, an overheated American job market is returning to room temperature.

The Labor Department is expected to report Friday that U.S. employers — companies, nonprofits and government agencies combined — added 170,000 jobs last month, according to a survey of forecasters by the data firm FactSet. That would be down from the 187,000 jobs that were added in July and would be the lowest monthly gain since December 2020.

“We are beginning to see this slow glide into a cooler labor market,’’ said Becky Frankiewicz, chief commercial officer at the employment firm ManpowerGroup. “Make no mistake: Demand is cooling off. … But it’s not a freefall.’’

The latest sign that the pace of hiring is losing some momentum — without going into a nosedive — would be welcomed by the Federal Reserve, which has been trying to tame inflation with a series of 11 interest rate hikes. The Fed is hoping to achieve a rare “soft landing,” in which it would manage to slow hiring and growth enough to cool price increases without tipping the world’s largest economy into a recession. Economists have long been skeptical that the Fed’s policymakers would succeed.

But optimism has been growing. Since peaking at 9.1% in June 2022, year-over-year inflation has dropped more or less steadily. It was 3.2% in July. But the economy, though growing more slowly than it did during the boom that followed the pandemic recession of 2020, has defied the squeeze of increasingly high borrowing costs. The gross domestic product — the economy’s total output of goods and services — rose at a respectable 2.1% annual rate from April to June. Consumers continued to spend, and businesses increased their investments.

The Fed wants to see hiring decelerate because strong demand for workers tends to inflate wages and feed inflation.

So far, the job market has been cooling in the least painful way possible — with few layoffs. The unemployment rate is expected to have stayed at 3.5% in August, barely above a 50-year low. And the Labor Department reported Thursday that the number of Americans applying for unemployment benefits — a proxy for job cuts — fell for a third straight week.

“Employers aren’t wanting to let their existing talent go,’’ Frankiewicz said.

Instead of slashing jobs, companies are posting fewer openings — 8.8 million in July, the fewest since March 2021. And American workers are less likely to leave their jobs in search of better pay, benefits and working conditions elsewhere: 3.5 million people quit their jobs in July, the fewest since February 2021. A lower pace of quits tends to ease pressure on companies to raise pay to keep their existing employees or to attract new ones.

Average hourly earnings aren’t growing as fast as they did last year, either: In March 2022, average wages were up 5.9% from a year earlier. In August, they’re expected to be up just 4.4%, the same as in July. Nancy Vanden Houten, lead U.S. economist at Oxford Economics, noted, though, that annual average pay increases need to slow to around 3.5% to be consistent with the Fed’s 2% inflation target.

Still, economists and financial market analysts increasingly think the Fed may be done raising interest rates: Nearly nine in 10 analysts surveyed by the CME Group expect the Fed to leave rates unchanged at its next meeting, Sept. 19-20.

Despite what appears to be a clear trend toward slower hiring, Friday’s jobs report could get complicated. The reopening of school can cause problems for the Labor Department’s attempts to adjust hiring numbers for seasonal fluctuations: Many teachers are leaving temporary summer jobs to return to the classroom.

And the shutdown of the big trucking firm Yellow and the strike by Hollywood actors and writers are thought to have kept a lid on August job growth.

United States News

Associated Press

AP Source: General Motors and Bedrock real estate plan to redevelop GM Detroit headquarters towers

DETROIT (AP) — General Motors and real estate firm Bedrock will jointly study how to redevelop the automaker’s huge headquarters tower complex in downtown Detroit, a person briefed on the plans said. GM CEO Mary Barra and and Bedrock Chairman Dan Gilbert plan to hold a news conference Monday afternoon to discuss the deal involving […]

1 hour ago

Former President Donald Trump waves as he arrives at Manhattan criminal court with his legal team o...

Associated Press

Trump’s history-making hush-money trial begins with challenge of picking a jury

Donald Trump arrived Monday at a New York court for the start of jury selection in his hush money trial, marking a singular moment in U.S. history.

1 hour ago

Associated Press

The Latest | Jury selection set to begin in Trump’s history-making hush money trial

NEW YORK (AP) — Donald Trump arrived Monday at a New York court for the start of jury selection in his hush money trial, marking a historic moment as the former president and presumptive nominee for this year’s Republican presidential ticket answers to criminal charges. It’s the first criminal trial of any former U.S. commander-in-chief […]

2 hours ago

Associated Press

Justice Thomas misses Supreme Court session Monday with no explanation

WASHINGTON (AP) — Supreme Court Justice Clarence Thomas was absent from the court Monday with no explanation. Thomas, 75, also was not participating remotely in arguments, as justices sometimes do when they are ill or otherwise can’t be there in person. Chief Justice John Roberts announced Thomas’ absence, saying that his colleague would still participate […]

2 hours ago

Associated Press

FBI opens criminal investigation into Baltimore bridge collapse, AP source says

The FBI is conducting a criminal investigation into the deadly collapse of Baltimore’s Francis Scott Key Bridge that is focused on the circumstances leading up to it and whether all federal laws were followed, according to someone familiar with the matter. The person was not authorized to discuss details of the investigation publicly and spoke […]

4 hours ago

Follow @ktar923...

Sponsored Content by Condor Airlines

Condor Airlines can get you smoothly from Phoenix to Frankfurt on new A330-900neo airplane

Adventure Awaits! And there's no better way to experience the vacation of your dreams than traveling with Condor Airlines.

Sponsored Articles

...

Condor Airlines

Condor Airlines can get you smoothly from Phoenix to Frankfurt on new A330-900neo airplane

Adventure Awaits! And there's no better way to experience the vacation of your dreams than traveling with Condor Airlines.

...

DISC Desert Institute for Spine Care

Sciatica pain is treatable but surgery may be required

Sciatica pain is one of the most common ailments a person can face, and if not taken seriously, it could become one of the most harmful.

(KTAR News Graphic)...

Boys & Girls Clubs

KTAR launches online holiday auction benefitting Boys & Girls Clubs of the Valley

KTAR is teaming up with The Boys & Girls Clubs of the Valley for a holiday auction benefitting thousands of Valley kids.

US jobs report for August could point to a moderating pace of hiring as economy gradually slows