The August jobs report from the Bureau of Labor Statistics is out and major changes could be coming. With unemployment ticking down slightly to 5.1% and average hourly wages rising by $.08, the decision for an interest rate hike could be looming.
This report is one of the most important data releases of the summer and had economists, experts and the U.S. labor market on edge Friday morning. The August jobs report from the BLS is said to be a major indicator of the Federal Reserve’s decision to implement the first interest rate hike since 2006. A decline in the national unemployment rate and an increase in wages is the key to the Fed’s case for a rise in rates, and this morning we saw both. However, it is important to note that because of the volatility in stocks and concerns about the impact of slowing foreign economies, the Fed may look past the strong data of this morning’s report and skip the interest rate hike. Let’s take a deeper look into this morning’s data.
National Jobs Data
Ahead of this month’s release, Economists predicted 217,000 jobs would be added. In reality, the BLS only reported an addition 173,000 new jobs to the workforce. June and July had revised numbers from their initial reports with June coming in at 245,000 jobs added instead of 231,000 and July was revised to 245,000 from 215,000. Over the past three months, jobs gains have averaged 221,000 per month.
As mentioned before, the unemployment rate and wages were top of mind for economists and the Fed. August numbers show a decline in unemployment and a rise in wages. Unemployment now sits at 5.1%, compared to 5.3% in July. Policy makes say an unemployment rate of 5.0%-5.2% indicates full employment. Average hourly earnings for all employees rose $.08 to $25.09. From a year earlier, wages increased 2.2%.
IT Industry Performing Better than Most Industries
While the national unemployment rate sits at 5.1%, the Professional, Scientific and Technical Services unemployment rate is significantly lower at 3.0%. This year has given us some of the lowest unemployment rates since 2007.
The Professional and Business Services sector continually adds jobs each month and August was no different. The tech industry was in the top 3 for job additions with 33,000 jobs added. The total jobs added in the last 12 months is 641,000.
Professional, Scientific and Technical Services, a sub-sector of the Professional and Business Services industry, contributed 14,500 new jobs to the industry in August. Of those, computer systems design and related services added 7,000 jobs and management and technical consulting services added 6,100.
IT workers are now earning more and working less hours. The average hourly earnings are $32.80, up $.17 from the month prior and the average weekly hours are now 36, down from 36.2 last month.
August Fast Facts
What is the Impact of IT Hiring Stats on Your Workforce?
What impact does the IT hiring data have on your workforce? Well, with the consistent jobs reports released over the last 6 months, competition to hire the best workers in the IT industry will ramp up. This means the ability to connect with top tech professionals will get harder. We’re constantly keeping our eye on the labor market so we can help you make the best hiring decisions for your workforce. With Modis as a strategic hiring partner, you stay ahead of your competitors and connect with exceptional tech professionals. Learn more about how we can move your business forward and contact us today!