This Week’s Highlights: A Look at America’s Employment Landscape
Happy Friday! It’s the beginning of the month, which means it’s Jobs Friday and also the start of Labor Day weekend. This edition of our weekly summary will delve into the job situation in the U.S.. And, of course, we’ve got some great tunes lined up for your weekend.
Let’s dive in!
Job Woes Back in Focus as Workloads Increase
Eddie Cochran’s classic from 1958, “Summertime Blues”, touches on the burdens of gaining employment—not just the struggle to find one, but the challenges of maintaining a job. This sentiment resonates with many Americans today, as we all seem to be busy and, well, slightly grumbling.
In August, the U.S. economy saw an addition of 162,000 jobs, blowing past the expected 55,000. This was, in fact, more than three times the predictions, surpassing even the most optimistic estimates of around 100,000. Moreover, revisions from the previous two months revealed better numbers than originally thought. June’s job count was adjusted from 20,000 to 31,000, while July’s figures changed from a loss of 23,000 to a gain of 21,000. These updates contributed an extra 55,000 jobs and reversed the supposed downturn in July.
The bulk of the job growth was in the private sector, where employers added 127,000 positions—more than double the anticipated figure of 53,000. July’s private-sector increase was also revised upward from 30,000 to 71,000.
Surprisingly, the expected rise in the unemployment rate didn’t materialize. It remained steady at 4.1 percent, while economists had projected it would increase to 4.2 percent. This trend, as we’ve noted for a while now, reflects an exceptional level of job security in the U.S.
Manufacturing Jobs Are on the Rise
Bruce Springsteen’s song “My Hometown” mourned the loss of American jobs due to deindustrialization. “They’re closing down the textile mill across the railroad tracks…” he sang, expressing a sentiment felt by many.
After years of decline and significant policy changes, American manufacturing jobs are returning. In August, manufacturing employment increased by 16,000, following gains of 13,000 in June and 14,000 in July. Since hitting a low point in December, manufacturing jobs have bounced back by a total of 58,000, with durable-goods sectors adding 15,000 workers in August, 24,000 in July, and a significant 52,000 in the past three months.
This marks a real turnaround. Manufacturing employment had been on a downward trend during the last months of the previous administration, continuing into 2025 but at a slower rate. The decline reversed last year, followed by job increases this year.
Construction jobs also added 22,000 positions in August, contributing to a total of 41,000 new jobs in goods-producing sectors.
The signs of a manufacturing revival are evident everywhere. Factory orders are up 6.5 percent for the year, particularly in machinery and electronics. The ISM manufacturing index reported growth for the eighth consecutive month, indicating robust economic activity. Manufacturing output saw its most substantial growth since 2021, with productivity and job openings also on the rise.
Higher Pay, More Challenges?
If the Notorious B.I.G. was correct in suggesting that more money leads to more problems, American workers might be bracing for new challenges.
The latest jobs report indicates that average hourly earnings increased by 3.1 percent over the past year, but, notably, this figure doesn’t fully capture the rise in workers’ pay since the average workweek also lengthened.
Private-sector employees were earning an average of $37.75 an hour in August and were putting in 34.4 hours per week. That totals about $1,298.60 weekly—an increase of $7.20 from July and $46.20 compared to last August, marking a 3.7 percent annual increase. At this rate, the yearly average paycheck is nearing $67,527.
Workers in the goods-producing industries, however, witnessed even more substantial gains, with average weekly earnings for those in manufacturing and construction rising significantly over the past year.
Production and nonsupervisory workers, who account for a large portion of private employment, earned an average of $32.53 an hour in August, resulting in an average weekly wage of $1,099.51, which is also a 3.6 percent increase from last year.
These trends reflect an economy functioning at nearly full capacity. With employers actively seeking to meet demand, they are incentivizing workers to take on more hours.
Labor Market Increasingly Domestic
“I’m American made, I’ve got American parts,” echoes a patriotic theme by Jon Kahn in his song “American Heart”, which fits well with today’s labor dynamics.
The number of foreign-born workers in the job market fell by almost one million since the start of the Trump administration. From a peak of 31.774 million in January 2025, this figure dropped to 30.780 million by August, translating to a 3.1 percent decline.
Additionally, the foreign-born labor force saw a sharper drop, falling from 33.307 million at Trump’s inauguration to 31.860 million in August, a reduction of approximately 1.45 million.
Interestingly, these foreign-born workers have not flooded unemployment figures; in fact, the count of unemployed foreign-born individuals decreased by about 453,000 during this time, bringing their unemployment rate down to 3.4 percent.
This represents a notable shift from the Biden era, wherein foreign workers formed a considerable part of employment growth. Under Trump, the employment of foreign-born individuals has notably decreased.
Some may not be thrilled with the latest employment data. For those banking on cheaper foreign labor for profits, the news may feel disappointing. It indicates that hiring Americans and offering competitive wages for longer hours is now essential.
August Employment Gains Are Primarily Full-Time
“Working nine to five, what a way to make a living,” as noted by the late Dolly Parton sang.
There’s a noticeable increase in Americans securing full-time work. It appears the part-time job market might be shrinking.
Last month, 569,000 more Americans found employment, contributing to an uptick in the employment-population ratio by two-tenths of a percentage point, reaching 59.1 percent, while the labor force participation rate moved to 61.6 percent. All these gains were achieved through full-time positions, with 735,000 additional workers in that category, while part-time roles decreased by 223,000.
There’s also been a significant reduction in involuntary part-time work, with the number of individuals working part-time due to cutbacks or an inability to find full-time employment dropping by 414,000 to 4.39 million.
This too signals a healthy employment landscape; many part-time roles are transitioning into full-time jobs.
Older Workers Contributing to Employment Growth
Paul McCartney once pondered whether anyone would still seek him out when he turned 64. As it turns out, employers had a resounding answer in August. Those aged 55 and older saw employment rise by 354,000, making up over 60 percent of the total job increases. Meanwhile, prime-age workers between 25 and 54 largely held steady, which aligns with expectations in a full employment setting.
But it wasn’t just older workers; younger generations, like Gen Z, are also making headway in the job market. Employment for individuals aged 20 to 24 climbed by 140,000.
In a thriving job market, it’s typical for more roles to be filled by both early-career and late-career individuals.
Participation Rate Decline Not Indicative of a Job Crisis
For a while now, there have been those voicing concerns that the low unemployment rate is merely a result of people leaving the job search.
That’s not quite accurate. Although the labor-force participation rate dipped by 0.5 percent since January and declined by 0.7 percent compared to a year ago (though there was a slight increase in August)—this decrease in the labor force is not predominantly due to a sense of hopelessness among the job-seeking public.
Economist Guy Berger pointed out on his MacroMostly Substack that the numbers of marginally attached workers haven’t increased; they actually fell by 132,000 over the past year. There was a similar decline of 78,000 among discouraged workers, and those who want a job but are out of the labor force decreased by 600,000.
Thus, the apparent rise in participation decline seems largely voluntary. It’s not driven by a surge of dependency on welfare. Rather, we’re probably seeing more retirees, students, caregivers, and parents making their own choices about whether to enter the workforce. An economy offering more choices is a positive evolution, not a cause for concern.
Sharp Decrease in Black Unemployment Rates
The unemployment rate for Black Americans dropped significantly, falling to 6.0 percent in August from 7.6 percent a year prior. This marks a major improvement, with unemployed Black individuals decreasing by 376,000 over the last year to 1.32 million.
This drop is seen among both genders, with Black men over 20 seeing their rate decline from 7.1 percent to 5.6 percent, and Black women dropping from 6.8 percent to 5.6 percent.
Interestingly, it seems proponents of systemic racism may not give Trump credit for these positive changes in Black unemployment; it doesn’t quite fit their narrative.
A big contributor to this decline is reduced competition from foreign labor, alongside the rise of opportunities in an economy at full employment.
Reflections on American Politics: McKinley’s Tariff Legacy
On September 6, 1901, President William McKinley was fatally shot by anarchist Leon Czolgosz. McKinley had constructed his political career around protective tariffs, famously leading to the McKinley Tariff of 1890, which significantly raised duties on imports. He understood that tariffs were essential for growing American industries and protecting American jobs.
The years following the implementation of the McKinley Tariff led to an extraordinary growth in American industry. Steel production, among other sectors, saw massive increases, transforming the U.S. into a dominant industrial power by 1913.
This economic boom also catalyzed a significant political shift, as McKinley’s victory mobilized a coalition of various sectors that upended previous electoral patterns. His administration’s influence lasted well into the 1920s, marking one of the most significant political realignments in American history.
