The real unemployment rate – August 2019 – We're close to making history
Bottom Line: There’s a lot more to the employment report than just a couple of headline numbers. The last several months has proved the value of not overreacting to any one employment report. Especially when we’re already at the lowest unemployment rate in 50 years. Weaker reports might mean that hiring is really slacking off, or it might mean that the labor market is so tight it’s hard for employers to hire when they’re looking to do so. Throughout the first half of 2019, when we saw weakness in hiring it was generally the later. Friday’s employment report, the first for the second half of the year showed a continuation of the first half themes, with a huge bonus. We’re seeing the long-term unemployed, marginally attached and underemployed receive record opportunity as companies are providing better jobs and opportunities to people in those situations.
First, the headline stuff.
- Unemployment rate 3.7% - flat
- +164,000 jobs
- Negative revisions from past months totaling -41,000 jobs
Top industries for hiring:
- #1 Professional & Technical Services
- #2 Healthcare
- #3 Social Assistance
Important takeaways:
- Healthcare has been consistently a leader in hiring but other industries like social assistance ramping up hiring is new
- Small businesses are continuing to struggle to hire as they compete against larger companies for talent
- Resurgence in manufacturing and construction hiring continued in July which is a good sign,the demand is still growing in the economy, even if the rate of growth is slowing
Now for the real unemployment rate once underemployed, long-term unemployed and marginally attached people are accounted for:
- Actual: 7% down from 7.5%yoy
Other takeaways:
1. The real-unemployment rate dropped significantly indicating that those often discounted by the base rate are obtaining opportunity they hadn't previously experienced
2. Those unaccounted for in the base unemployment rate include 6.7 million Americans (1.2 million long-term unemployed, 4 million are underemployed & 1.5 million are marginally attached to the workforce).
3. There are only two months in American history with a lower real unemployment rate