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You are Here: Home > Blog > Unemployment Rate – August 2016

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Unemployment Rate – August 2016

Friday, September 2nd, 2016

Job growth slowed more than economists had expected in August, after two months of booming numbers well over 200,000 per month. The unemployment rate remained unchanged from July.

According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the private sector netted 126,000 nonfarm job gains in August. Local, state and federal governments netted 25,000 jobs, resulting in only 151,000 total net job gains. Economists had expected at least 180,000 total job gains, according to various sources.

The BLS revised job gains for June and July 2016, showing that the economy netted 1,000 fewer jobs than the BLS had previously estimated. After that revision, job gains have averaged 232,000 per month in the past three months. In the past year, job gains have averaged 204,000 per month.

The unemployment rate remained steady at 4.9 percent. The rate rose in June (from 4.7 to 4.9 percent) and remained steady through August, mostly because more unemployed workers entered or re-entered the job market.

The private sector has now gained nonfarm jobs for 78 consecutive months since the Great Recession. The unemployment rate has dropped 5.1 percentage points from the recessionary high of 10.0 set in October 2009. (More information about the unemployment rate is below.)

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Jobs in food services and drinking places continued to trend upward. The industry netted 34,000 jobs in August and has netted 312,000 jobs over the past year.

Jobs in the professional and technical services industry edged upward by 20,000 in August. The industry has averaged 24,000 jobs per month over the past year.

At 14,000, job growth continued in health care as it has for years, but at a slower pace than in previous months. (The industry averaged 39,000 jobs per month over the past year.) Much of the industry’s steady job growth over the past few years is attributable to the increasing medical demands of aging baby boomers and the ever-growing obesity epidemic, and to provisions in the Affordable Care Act (“Obamacare”) as well.

Manufacturing, one of the standard measures of labor-market health, lost 14,000 jobs in August. Construction, also a measure of labor-market health, lost 6,000 jobs.

The mining industry continued losing jobs (-4,000), again due mostly to lower oil prices. The industry has lost 223,000 jobs since reaching a job-growth peak in September 2014. Most of the job losses are in mining support operations. (See Table B by the BLS for more job numbers listed by industry.)

Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (15.7 percent) followed by Blacks (8.1), Hispanics (5.6), adult women (4.5), adult men (4.5), Whites (4.4) and Asians (4.2, not seasonally adjusted).

Workers who are 25 years of age or older and who have earned four-year college degrees or higher experienced a 2.7 percent unemployment rate in August, 0.2 percentage points higher than in June and July (2.5). Those in the same age group and who don’t have high school diplomas suffered a much higher 7.2 percent rate, almost a full percentage point higher than in July (6.3). (See Table A-5 by the BLS for more information about the unemployment rate by education level.)

Unemployment Rate 2008 to 2016
Unemployment Rate Chart 2008 to 2016

The unemployment rate has remained at 4.9 percent over the past three months and in five of the eight months so far this year. It rose to 5.0 percent in March and April, but then fell to 4.7 in May. Economists consider an unemployment rate of around 5.0 percent to be normal.

In order for the BLS to count workers as unemployed, they must have been actively seeking jobs in the four weeks preceding the count. The number of workers that the BLS counted as unemployed in August was 7.8 million, the same as in June and July. That’s at least partly why the unemployment rate has remained at 4.9 percent for the past three months.

The count of unemployed workers does not include those who are involuntarily working only part time and with fewer benefits, if any, such as no health insurance, because they can’t find full-time jobs or employers cut their work hours. The number of involuntarily part-timers in August was 6.1 million, up from 5.9 million in July and 5.8 million in June.

The average workweek for all part-timers and full-timers in the private sector decreased by 0.1 hour to 34.3 hours in August. Average hourly earnings increased by 3 cents to $25.73 in August, after increasing by 8 cents in July. Average hourly earnings have risen by 2.4 percent in a year. For private-sector production and nonsupervisory employees, average hourly earnings increased by 4 cents to $21.64 in August, after increasing by 7 cents in July.

The unemployment rate also does not include “marginally-attached” unemployed workers. The BLS does not count them in the official rate because they stopped looking for work in the four weeks preceding the count, for reasons such as school attendance, family matters or their collective perception that there simply are no jobs — at least not for them.

The number of marginally-attached workers in August was 1.7 million, down from 2.0 million in July. Among the marginally-attached, 576,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs. That was down by 15,000 from the 591,000 that the BLS reported in July. (The BLS does not seasonally adjust any of the figures in this paragraph.)

The number of long-term unemployed workers — those who have been without jobs for 27 weeks or longer — was 2.0 million in August, the same as in June and July. These workers accounted for 26.1 percent of the unemployed. Standard state unemployment benefits last only up to 26 weeks without extensions.

If you are a recent victim of job loss or a reduction in work hours resulting from the high unemployment rate, then you might be eligible to collect full or partial unemployment benefits from the state unemployment office. You might also be eligible to continue your employer-provided group health insurance coverage through COBRA.

For more details about the August 2016 unemployment rate and job numbers, see the “Employment Situation Summary” by the BLS. The BLS plans to report the September 2016 unemployment rate and job numbers on October 7. To receive notification like the above automatically, subscribe to Employee Rights Blog for free.

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Except where otherwise noted, figures in this unemployment rate report were rounded and/or seasonally adjusted by the BLS, and are subject to revision by same (based on additional data that was not initially available). The unemployment rate chart pictured above was provided by the BLS.

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