The report also gave markets their first glimpse of August inflation, showing average hourly wages accelerating slightly to 0.2% on a monthly basis, as expected. Year-on-year, wage growth cooled a bit, to 3.1% from 3.2%. But analysts predicted a slightly larger drop, to an even 3.0%.
While annual wage growth is stronger than the most recent core CPI reading of 2.5%, it's cooler than 3.4% headline CPI. That means real wage growth is in negative territory, if you factor in food and energy prices. That bodes ill for consumers, who carry about 70% of the U.S. economy on their shoulders.
"The labor market remains a source of muted inflation pressure," writes Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. "The low quits rate is enabling employers to stand their ground in wage negotiations."
Elsewhere in the report, the uptick in the labor market participation rate — to 61.6% from 61.4% — is a step in the right direction.
Especially considering the unemployment rate held firm at a low 4.1%.
Typically, increasing participation puts upward pressure on the jobless rate; when workers are on the sidelines, they're not considered unemployed.
Despite the participation uptick, it's still very low by historical standards, lest we get too excited.
The average unemployment duration increased to 26.1 weeks from July's 23.7. That metric has been zig-zagging higher for about two years, and corresponds with the general downward trend of jobs confidence reflected in consumer survey data.
Broken down by race and ethnicity, joblessness among White workers ticked a shade higher, to 3.7% from 3.6%, still well below the national average. Unemployment among those who identify as Hispanic increased to 4.8%, while Asian unemployment dipped to 3.3%. The jobless rate among Black workers decreased to an even 6.0%, the lowest level in a year and a half.
Taken together, the White/Black jobless gap dropped to 2.3 pps, the narrowest it's been since October 2024.
"Unemployment among Black workers often serves as a bellwether of trends in the broader labor market," notes Bill Adams, chief U.S. economist at Fifth Third Commercial Bank.
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