Despite the decent numbers the report is being called a mixed bag of news because it contains very few clues as to to whether the Federal Reserve will raise interest rates later this month. This uncertainty has added a yet another reason as to why the stock market has been so volatile as of late. another reason why the this Friday's report was so closely watched was because it is the last snapshot of the job market before the Fed meets in two weeks.
Overall, it painted a picture of an economy growing at a modest but steady pace seven years after the Great Recession.
This is how this months report breaks down...
- The unemployment rates fall from 5.3 percent in July to its current 5.1 marks it's lowest point since 2008 and is now at a level Fed officials say is consistent with a healthy economy.
- Employers added a moderate 173,000 jobs in August, the fewest in five months.
- The department revised previous months' numbers with June moving from 231,000 to 245,000 and July going from 215,000 to 245,000. Average job creation over the past 12 months was at 247,000.
- Wage gains remained muted though did manage to rise eight cents an hour to $25.09 from July, up 2.2 percent from a year ago.
- The aforementioned prospect of higher interest rates, which would push up borrowing costs for mortgages and other loans for consumers and businesses, weighed heavy on the stock market causing the Dow Jones industrial average plunging 272 points, or 1.7 percent.
- Fed officials have been saying the economy appears to be getting strong enough to tolerate the first increase in interest rates in a decade. They have signaled that they might raise rates at their Sept. 16-17 meeting.
- It is a good sign that America's economy remains robust despite China's stumbling economy that caused violent swings in the world's financial markets
- Despite the already good numbers August's jobs totals are typically revised much higher in later months, because of the difficulties in adjusting the data for the end of millions of summer jobs.
- Consumer spending has been healthy and has been powering job growth at retailers, restaurants and hotels.
- State and local governments added 31,000 jobs in August, while health care and social assistance led the way with 56,000 new workers. Financial activities added 19,000, while professional and business services contributed 33,000.
- Manufacturing companies have been stumbling amid the global headwinds cutting 17,000 jobs in August, the most since July 2013.
Here are some of the views of economic annalists about this months jobs numbers.
Carl Tannenbaum, chief economist at Northern Trust and a former Fed official said...
"We're well on our way to full employment if we aren't already there"
Scott Clemons, chief investment strategist at Brown Brothers Harriman posited...
"This just continues the trend that we've seen where all sectors of employment continue to improve modestly."
Megan Greene, chief economist at John Hancock Asset Management. said…
"Anyone hoping today's data would clear up the timing of the Fed's first rate hike in years will be sorely disappointed,"
Chris Williamson, chief economist at the financial information firm Markit, said Friday's report provided...
"frustratingly little new insight into whether the Fed will start to raise rates."