PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

The Issue of Sustainability: Weak Jobs Report for August

By at 1 September, 2017, 10:13 am

by Raymond J. Keating-

There’s no way around it. The jobs report for August, released on September 1 by the U.S. Bureau of Labor Statistics, was poor. (As noted in the report, Hurricane Harvey did not affect the data.)

In terms of the establishment survey, payrolls increased by only 156,000 in August. That’s well short of where payroll gains should be during a recovery/expansion period. For good measure, monthly payroll gains have been generally declining since February.

As for the household survey, which tends to better capture startup and small business activity, the data got even uglier. First, the labor force barely inched forward with a gain of 77,000. However, employment actually declined by 74,000, and the number of unemployed increased by 151,000 and those not in the labor force rose by 128,000.

The household survey does tend to volatile month to month. And this decline came after a gain of 345,000 in July, and 245,000 in June. So, hopefully, the poor report for August is only a one-month issue.

But this latest jobs report brings us back to the issue of sustainability in our economy. Throughout this recovery/expansion period since mid-2009, we’ve seen some good months here and there in terms of economic data, but we’ve been unable to hold that for any extended period. Therefore, when it comes to jobs, the U.S. labor force participation rate in August registered 62.9 percent, which is off from pre-recession levels topping 66 percent. And while the employment-population ratio in August stood at 60.1 percent, that’s well off pre-recession ratios of exceeding 63 percent (see chart).

U.S. entrepreneurs, businesses and investors need to see significant policies implemented that, most critically, reduce tax and regulatory burdens. Sustainability in terms of solid developments in our economy needs a foundation of substantial tax and regulatory relief.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.

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