U.S. employers added 315,000 jobs in August
ARI SHAPIRO, HOST:
Working people got some good news heading into the Labor Day weekend. Workers are still in high demand. We learned today that U.S. employers added 315,000 jobs last month, and that means employment is now back to pre-pandemic levels, with more than 3.5 million jobs added so far this year. Wages are also climbing, though not fast enough to keep up with inflation. Still, President Biden says the economy is moving in the right direction.
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PRESIDENT JOE BIDEN: Bottom line is jobs are up. Wages are up. People are back to work. And we're seeing some signs that inflation may be - I'm not going to overpromise here - may be beginning to ease.
SHAPIRO: NPR's Scott Horsley has been studying what else today's jobs report reveals. Hey, Scott.
SCOTT HORSLEY, BYLINE: Hi, Ari.
SHAPIRO: Sounds like employers are still hiring at a rapid pace, and yet the unemployment rate went up last month. Can you explain what's going on there?
HORSLEY: Unemployment did inch up a bit but only because a huge number of people entered or reentered the workforce. Almost 800,000 people came off the sidelines in August and started looking for work. Many of them found jobs right away. Some did not. And you only get counted as unemployed if you're looking for work, so the unemployment rate rose. But it's still just 3.7%, which is very low by historical standards. And there's still a ton of job openings out there. So a lot of those new job seekers should be able to find work pretty quickly.
SHAPIRO: Any idea why almost 800,000 people would suddenly start looking for jobs last month?
HORSLEY: Good question. Or to put it another way, what took them so long? You know, up until last month, jobs had been coming back more quickly than workers had. In fact, earlier this summer, we actually saw a drop in the number of people looking for work. So that August turnaround is encouraging. Part of it could be the new school year, which might be freeing up parents to go back to work. Part of it could be people feeling less worried about COVID. Those would be the positive explanations. On the negative side, inflation could be a factor. Betsey Stevenson, who's an economist at the University of Michigan, says some people might feel like they have to go back to work just because the cost of living keeps going up.
BETSEY STEVENSON: People are being sort of pushed by the rising prices to think, my savings are getting hit a little bit too hard. And we've been seeing people in the last few months dip into their savings.
HORSLEY: Whatever the explanation, the share of people who are working or looking for work increased significantly last month for women in their prime working years. That share is basically back to where it was before the pandemic, which is really encouraging. You might remember that a lot of working women dropped out of the labor force early in the pandemic. The share of working-age men, however, still has a way to go to get back to pre-pandemic levels.
SHAPIRO: Let's talk about inflation. The president said there are signs that inflation might be easing. We know gas prices are down. What else is going on there?
HORSLEY: Today's report may offer some good news on that score. Inflation watchdogs at the Federal Reserve have been worried that the job market is overly tight and that if there aren't enough workers to go around, both wages and prices could then spiral out of control. If that's what you're worried about, Stevenson says, this big influx of workers should come as some relief.
STEVENSON: The Fed's concern is that if people aren't coming into the labor force willing to take those jobs, that demand for workers is just going to create inflationary pressure. But if instead that demand for workers is drawing people back into the labor force, we'll be able to meet employers' demands for hiring without it creating additional inflationary pressure.
HORSLEY: So we still have a tight job market but not as tight as it was, and that could take a little wind out of the inflationary sails. The stock market seemed to read it that way this morning. Stocks rallied when the report first came out, but then investors fell back in a funk, and stocks ended down about 1%.
SHAPIRO: NPR's Scott Horsley. Thanks a lot.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.