NFP: Slower job growth but wages pick up - Wells Fargo

The August employment report showed that the US economy added 201.000 jobs. Analyst at Wells Fargo, point out it market an improvement versus July, but the overall trend in hiring is slowing as employers are increasingly having trouble finding workers.

Key Quotes: 

“Hiring in the United States bounced back in August, with employers adding 201,000 jobs. Gains were somewhat mixed. Job growth was solid in professional & business services, education & health and transportation, but manufacturing employment slipped by 3,000 jobs, breaking a 12-month run of gains.

“Difficulty finding workers rather than a lack of demand is contributing to the slowdown, in our view. The share of small businesses reporting they have at least one job hard to fill rose to the highest level in the survey’s 45-year history in August, while JOLTS data from the BLS show the job opening rate similarly hovering near record highs.

“Wage growth is picking up as a result of employers increasingly having trouble finding workers. Average hourly earnings rose 0.4% in August and are up 2.9% over the past year. Although that remains weaker than the pace registered in previous cycles, the pace is picking up and wage growth is now running at the strongest pace of this expansion.”

“The unemployment rate was unchanged in August at 3.9%, but down 0.5 percentage points over the past year. We expect to see downward pressure on the unemployment rate continue in the months ahead.”

“Strong hiring and strengthening wage gains should keep the Fed on track to raise rates not only at its meeting later this month, but also again in December.”