Ball State University Economist Mike Hicks calls the August national employment report a "major disappointment." He says in addition to lower-than-expected job creation totals, wages grew very little and more adults left the work force than entered it, which signals overall economic weakness.
Hicks says "more worrisome was that we saw a large spike in part-time work for economic reasons. So, of the 175,000 new jobs created, 158,000 were effectively part-time jobs to workers trying to find full-time employment. In August, a further 25,000 more workers held more than two jobs, suggesting that in raw numbers, these preliminary numbers signal a weaker than expected labor market."
Economists throughout the country expected new job totals to increase by more than 200,000 in August. The Federal Reserve was looking for wage growth of 3.5 percent, but the Bureau of Labor Statistics numbers only show a 2.2 percent increase.
"Wage growth was much slower than inflation and the composition of job changes signaled weakness across the economy. Employment declines in mining and resource extraction were expected, but the big losses came in manufacturing and other goods producing sectors. Educational workers and health care employees saw improvements, but outside that sector, job changes were either small or mixed."
Hicks points out the report is preliminary and says it is "sure to be revised in the coming months." Based on the report, Hicks does not anticipate the Fed will raise interest rates later this month.