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August’s Job Gains Are Below Market Expectations

At 173,000, August’s job gains are below market expectations and make a September rate hike by the Fed less certain

The first Friday of the month at 8:30 EDT is widely anticipated by market participants as the Labor Department presents a fresh gauge of the most recent economic performance in its release of the labor report for the prior month.  Today’s number was even more closely watched since it will be the most up to date information on the labor market that the Federal Reserve has prior to its upcoming September meetings where it will assess the state of the economy and determine whether or not it should raise its benchmark interest rate which has been near zero since the depths of the recession in late 2008. 

For August, a 173,000 job gain was reported, below market expectations (217,000), but the prior two months were upwardly revised by a combined 44,000 jobs.  The unemployment rate slipped back to 5.1%, the lowest level since April 2008 and near, if not at, the level considered to be “full employment”.   The wider measure of unemployment, the U-6 measure, fell to 10.3%.  Wage growth remained relatively benign in this data release, with average hourly earnings rising at a 2.2% pace from year-earlier levels. Anecdotal evidence from seniors housing operators suggest wage pressures are mounting, however.

The report suggests that the economy continues to strengthen.  However, the data are not emphatically strong and makes a move by the Fed on September 16th and 17th less than certain.  The wide swings in the stock market in recent weeks, as well as weakening expectations on global economic growth adds to the uncertainty and gives the Fed plenty of things to think about before they pull the trigger and start to normalize monetary policy.


Source: Bureau of Labor Statistics, NY Times

Topics: Research

About the Author

Beth Burnham Mace

Beth Burnham Mace is the Chief Economist and Director of Outreach at the National Investment Center for Seniors Housing & Care (NIC). Prior to joining the staff at NIC, she served as a member of the NIC Board of Directors for seven years and chaired NIC’s Research Committee. Ms. Mace was also a Director at AEW Capital Management and worked in the AEW Research Group for 17 years. Prior to joining AEW in 1997, Ms. Mace spent ten years at Standard & Poor’s DRI/McGraw-Hill as the Director of the Regional Information Service. She also worked as a Regional Economist at Crocker Bank, the National Commission on Air Quality, the Brookings Institution and Boston Edison.

Ms. Mace is a member of the National Association of Business Economists (NABE), the Urban Land Institute (ULI), ULI’s Senior Housing Council and New England Women in Real Estate (NEWIRE/CREW). In 2014, she was appointed a fellow at the Homer Hoyt Institute and was awarded the title of a “Woman of Influence” in commercial real estate by Real Estate Forum Magazine and Globe Street. Ms. Mace is a graduate of Mount Holyoke College (B.A.) and the University of California (M.S.). She has also earned The Certified Business Economist™ title (CBE) from the National Association of Business Economists (NABE). Ms. Mace is often cited in the Wall Street Journal, the New York Times, Seniors Housing Business, Seniors Housing News and McKnight’s Senior Living and has a bi-monthly column in the National Real Estate Investor.
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