Signs of Hope Despite August's Disappointing Labor Numbers

WASHINGTON, DC—No doubt about it: last week's report on job creation in the US economy for the month of August was disappointing. The US Labor Department reported that the economy created 142,000 jobs for the month; economists, however, had been expecting 225,000 jobs to be added to the nation's payrolls.

By and large economists are sanguine about the miss—many have chalked it up to a one or two month blip. But as we wait to see whether this assumption is indeed accurate, we have two separate data points that can provide some comfort.

One is a blog post from Marcus & Millichap that points to the recent upbeat reports on other segments of the economy and goes on to predict that the August numbers will "ultimately will have little effect on economic growth in the second half of 2014."

"Average monthly job gains this year exceed the levels recorded one year ago, and US employers remain firmly on track to add 2.7 million jobs this year," it said.

"Job creation will accelerate in the months ahead, but the gradual tightening of the labor market will not force the Federal Reserve to alter its timeline for raising its benchmark interest rate."

Marcus & Millichap also pointed to recent declines in layoff announcements and initial unemployment claims. Hiring is generally rising, it said, "while a consistent rise in the number of workers purposely quitting jobs underscores a greater level of worker confidence in their ability to find employment."

The second indicator that the employment market is on a solid footing comes from a survey conducted by the Associated General Contractors of America and SmartBrief. It found that there is labor shortage, at least for skilled workers, in some pockets of the construction industry and as a result companies have had to turn down work.

It found that two out of three respondents have faced a labor shortage over the past year and that one out of four companies turned down work as the result of the shortage of skilled labor.

The survey also noted that three out of four companies are willing to pay more to obtain the skills they need in the labor market and that seven out of 10 companies say they are paying skilled laborers more this year, with 13% describing that increase as "significant."

"Many construction firms are already having a hard time finding qualified workers and expect construction labor shortages will only get worse," said Stephen E. Sandherr, chief executive officer of AGC in a prepared statement.