---
title: August Jobs Report - Burney Investment Management
description: Today is the first Friday of the month so, of course, that means today is jobs day as the Bureau of Labor Statistics released its monthly jobs report at 8:30.   After the economy added 200k jobs or more each of the last 7 months, a streak that hasn’t happened since 1997, economists were anxious to ...
---

[Investment Management Blog | Burney Investment Management](https://burneyinvest.com/blog)

# [August Jobs Report - Burney Investment Management](https://burneyinvest.com/blog/august-jobs-report)

 Written by [Andy Pratt, CFA](https://burneyinvest.com/blog/author/andy-pratt-cfa) | 9.5.2014

Today is the first Friday of the month so, of course, that means [today is jobs day](http://www.vox.com/cards/jobs-day-the-employment-situation-report-release-is-awesome/why-do-people-pay-attention-to-jobs-day#E5435329) as the Bureau of Labor Statistics released its monthly jobs report at 8:30.   After the economy added 200k jobs or more each of the last 7 months, [a streak that hasn’t happened since 1997](http://www.businessinsider.com/july-jobs-report-200k-growth-for-first-time-since-1997-2014-8), economists were anxious to see if that streak could continue. Private payroll firm ADP earlier this week said [private payrolls climbed 204k](http://www.businessinsider.com/adp-september-4-2014-9) and market expectations for the jobs report were as follows:

- Payrolls: +230k
- Unemployment Rate: 6.1%
- Hourly Earnings: +0.2%
- Average Hours: 34.5

[August’s report came in well below expectations](http://t.co/zqorrK1PCE), the lowest payroll gains of the year, at +142k jobs while the unemployment rate ticked down 0.1% to 6.1%. Here are the headline numbers:

- Payrolls: +142k
- Unemployment Rate: 6.1%
- Hourly Earnings: +0.2%
- Average Hours: 34.5

And here are some deeper numbers:

- Net Revisions: -28k 
    - June -31k
    - July +3k
- Labor Force Participation Rate: 62.8% (down .1%)
- Household Survey: +16k
- U-6 Unemployment: 12.0% (Down from 12.2%)

> Not dreadful, but disappointing. The labor market recovery still continues, but while we had hoped it had stepped up a gear, it hasn’t.
> 
>  — Justin Wolfers (@JustinWolfers) [September 5, 2014](https://twitter.com/JustinWolfers/status/507868780005822466)

The trend for a while now has been a steadily improving jobs market and while there were hopes for a major break out, moderate jobs growth has been the story for years now.

> Every time it looks like the economy has broken out of its trend of producing 150-200k jobs, we’re disappointed. Lesson: Data are noisy.
> 
>  — Justin Wolfers (@JustinWolfers) [September 5, 2014](https://twitter.com/JustinWolfers/status/507869796738674688)

It is essential to remember that this report is the preliminary report and [will be revised multiple times in the coming months](http://www.vox.com/cards/jobs-day-the-employment-situation-report-release-is-awesome/jobs-report-accurate#E5435329). It is also just one data point that does nothing to change the long-term trend.

> Despite disappointing report, no meaningful change in longer-run growth trend. [pic.twitter.com/yGtUJWuhRh](http://t.co/yGtUJWuhRh)
> 
>  — Ben Casselman (@bencasselman) [September 5, 2014](https://twitter.com/bencasselman/status/507870161647697920)

This report is also a bit of a headscratcher as it is at odds with the majority of recent economic data. This could make August a candidate for major revisions or it could simply be an outlier. Remember, this data can be noisy with a margin of error of +/- 100,000 jobs.

> This number is a classic NFP headscratcher. No preliminary data suggested it (ISM, ADP, claims), and August has a tendency to be revised up.
> 
>  — Bespoke (@bespokeinvest) [September 5, 2014](https://twitter.com/bespokeinvest/status/507869518249484288)

The headline unemployment number of 6.1% will be cited across the newswires all day today but the more meaningful unemployment number is the broader U-6 measure of unemployment that includes marginally attached workers and people who are looking for full time jobs but have to settle on part-time jobs for economic reasons. This is one of the bright spots on the report as U-6 fell 0.2% to 12.0%.

Make no mistake, this was a disappointing report to end the streak of 200k+ jobs gained per month. Bond yields plunged 1.64% upon release and stock futures actually rose. This is likely because the disappointing numbers in the jobs report increases the likelihood that interest rates will be held low for a longer period of time than before. However, month-to-month reports are volatile and this report is at odds with the majority of other economic data. This sums it up best:

> This employment report will be revised up to seven times, with an average revision of 46,000 jobs. Be sure to have a major reaction to it.
> 
>  — Downtown Josh Brown (@ReformedBroker) [September 5, 2014](https://twitter.com/ReformedBroker/status/507875885135835136)

[View full post](https://burneyinvest.com/blog/august-jobs-report)

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