The Labor Department’s Bureau of Labor Statistics reported 315,000 new jobs in the month of August, slightly below market expectations. The unemployment rate rose to 3.7 percent last month because of job seekers rejoining the labor market.
CEI research fellow Sean Higgins said:
“The Labor Department’s report Friday that the nation gained 315,000 jobs in August but that the employment rate nevertheless rose to 3.7%, up from 3.5% the prior month, indicates that more people are getting back into the workforce and actively looking for jobs. People are anxious about the state of the economy and feeling the bite of inflation. The labor force participation rate was 62.4%, up 0.3 points in August, due to workers realizing that they can no longer hold out for better deals from employers.”
CEI senior fellow Ryan Young said:
“The labor market had another good month, with the labor force growing by 315,000 people. The bad news is that, at 163.96 million people, total labor force size is still about 600,000 people smaller than its pre-COVID peak, despite two years of population growth. In that sense, the slight upward tick in the unemployment rate from 3.5 to 3.7 percent is potentially good news. It indicates that more people are looking to get back to work.
“Policymakers can help by getting out of the way. They should remove excessive occupational licensing requirements, lift tariffs, and clear supply chain-clogging regulations such as the Jones Act. More liberal zoning restrictions, environmental reviews, and permit requirements can create jobs and ease housing prices by allowing more construction projects to move forward.
“The Federal Reserve should stick to its commitment to fight inflation, even though it will be at least next year before it comes down to its 2 percent target. Another discouraging factor is that real wages are not keeping up with inflation. Businesses can keep existing workers and entice new ones simply by paying workers more, without any intervention from Washington.”
CEI research fellow Joshua Bandoch said:
“While the unemployment rate went up slightly in August, the silver lining is it is driven by more Americans getting off the sidelines and reentering the work force. That said, the economy still needs more workers and we need to see a larger increase in the labor force participation rate in the coming months.”