The Weekly Wrap: This Is What Full Employment Looks Like
Welcome back to Friday! It’s the first Friday of the month, which means it is Jobs Friday, and it is now Labor Day weekend. This will be a special edition of our weekly wrap focused on the employment situation in America. Plus we’ve got a lot of musical accompaniment to get you through the weekend.
Let’s go!
The Summertime Blues Is Back Because Everyone Is Working
Eddie Cochran’s 1958 hit “Summertime Blues” was about the problems of summer employment—not the difficulty of finding a job but the trouble of having one. Lots of Americans know just how that feels now. We’re all working and everyone is grumbling.
The U.S. economy added 162,000 jobs in August, compared with the consensus forecast of 55,000. Not only did we add more than three times as many jobs as expected, but we also exceeded even the most bullish forecasts for around 100,000 jobs. What’s more, the prior two months were substantially better than earlier reported. June was revised from 20,000 to 31,000, while July was revised from a 23,000 loss to a 21,000 gain. Together, the revisions added 55,000 jobs and erased the supposed July contraction.
The strength came overwhelmingly from the private sector. Private employers added 127,000 jobs, more than double the 53,000 forecast. July’s private-sector gain was also revised from 30,000 to 71,000.
Also, the forecast unemployment increase never arrived. The unemployment rate held at 4.1 percent, while economists expected it to rise to 4.2 percent. As we’ve been talking about for months, jobless claims and the unemployment rate demonstrate unprecedented job security in America.
The Factory Floor Is Hiring Again
Bruce Springsteen’s 1984 hit “My Hometown” was a lament about the deindustrialization of America. “They’re closing down the textile mill across the railroad tracks/ Foreman says ‘These jobs are going, boys, and they ain’t coming back,’” Springsteen sang.
It has taken decades and a revolution in trade, tax, and economic policy, but the jobs are coming back. Manufacturing employment rose by 16,000 in August. This followed gains of 13,000 in June and 14,000 in July. Manufacturing payrolls have now risen by 58,000 since bottoming in December. Durable-goods manufacturers added 15,000 workers in August, 24,000 in July, and 52,000 over the past three months.
This marks a genuine reversal. Manufacturing employment was falling during the final quarters of the Biden administration. The losses continued into 2025, although at a diminishing pace. Last year brought the turn away from decline. This year brought job gains.
Construction added another 22,000 workers in August, lifting total goods-producing employment by 41,000.
The evidence of the manufacturing boom is everywhere. Factory orders are up 6.5 percent this year, including gains of 12.3 percent for machinery and 14.3 percent for computers and electronics. The ISM manufacturing index hit 54.6 in August, its eighth consecutive expansionary reading. Its production index was 58.3, and its employment gauge rose to 51.2. Manufacturing output grew at a 5.4 percent annual rate in the second quarter, the strongest since 2021. Durable-goods output surged 8.9 percent. Productivity is rising, orders are growing, job openings are climbing, and now payrolls are following.
Mo’ Money, Mo Problems?
If the Notorious B.I.G. was right when he sang that more money just brings more problems, the American worker better get ready to get jiggy with it.
The jobs report said average hourly earnings rose 3.1 percent over the past year. But that understates the improvement in workers’ paychecks because the average workweek also increased.
Private-sector employees earned an average of $37.75 an hour in August and worked 34.4 hours per week. Multiply the two and average weekly earnings came to $1,298.60. That was up $7.20, or 0.6 percent, from July. Compared with August of last year, weekly earnings increased by $46.20, or 3.7 percent. At an annual rate, the average weekly paycheck now comes to around $67,527.
The gains were even stronger in goods-producing industries. Average weekly earnings for goods-producing workers rose 5.6 percent over the year to $1,566.86. Manufacturing weekly earnings increased 5.1 percent to $1,495.26. Construction workers averaged $1,645.57 per week, up 5.8 percent.
Production and nonsupervisory workers, who account for roughly four-fifths of private employment, earned an average of $32.53 an hour and worked 33.8 hours. That produced average weekly earnings of $1,099.51, an increase of 3.6 percent from a year ago.
This is another sign of an economy operating at full employment. Employers are paying workers to put in more hours in order to meet demand.
Hourly pay measures the price of an hour of labor. Weekly earnings come closer to measuring what lands in the paycheck. In August, workers benefited from both higher hourly wages and longer hours, with the strongest gains going to workers who make, build, and move things.
The Labor Market is Increasingly Made in America
“I’m American made, I’ve got American parts,” Breitbart’s Jon Kahn sings in his patriotic anthem “American Heart.“ That’s increasingly a fitting anthem for our labor market.
The number of foreign-born workers holding jobs has fallen by nearly one million since President Donald Trump took office. Foreign-born employment stood at 31.774 million in January 2025. By August, it had fallen to 30.780 million, a decline of 994,000, or 3.1 percent.
The foreign-born labor force has contracted even more sharply. It fell from 33.307 million when Trump took office to 31.860 million in August, a decline of nearly 1.45 million.
The missing foreign-born workers have not piled into the unemployment rolls. The number classified as unemployed fell by approximately 453,000 over the period. The foreign-born unemployment rate is now just 3.4 percent.
This represents a dramatic break from the Biden era, when foreign-born workers supplied an enormous share of the growth in employment and the labor force. Under Trump, the number of foreign-born people working or looking for work has moved sharply in the opposite direction.
Perhaps not everyone is happy with the employment report. If you really were hoping that cheap foreign labor would boost your bottom line, there’s nothing but bad news for you. You are going to have to hire Americans and, as we just noted, pay them more to work longer hours.
August’s Employment Surge Was Full-Time Work
“Working nine to five, what a way to make a living,” the late, great Dolly Parton sang.
Americans are indeed increasingly working in full-time jobs. Sorry, slackers. We’re all out of part-time gigs.
The number of employed Americans jumped by 569,000 in August. The employment-population ratio rose two-tenths of a percentage point to 59.1 percent, while the labor-force participation rate climbed to 61.6 percent. And the entire gain came from full-time employment. The number of Americans working full-time rose by 735,000. Part-time employment fell by 223,000.
There was also a sharp decline in so-called involuntary part-time work. The number of people working part-time because their hours had been cut or they could not find full-time employment fell by 414,000 to 4.39 million.
This too is a sign of full employment. Part-time jobs are being converted to full-time jobs.
Older Americans Drove the Household Employment Gain
Paul McCartney once wondered whether anyone would still need him when he was 64. In August, American employers supplied an emphatic answer. Employment among people 55 and older rose by 354,000. That was more than 60 percent of the overall increase of 569,000. Prime-age employment, covering workers from 25 to 54, was essentially unchanged, which is what you would expect in an economy already at full employment.
But it wasn’t just aging boomers finding work. Gen Z found jobs as well. Employment among 20- to 24-year-olds rose by 140,000.
In a full-employment economy, more and more of the jobs go to workers in the dawn and twilight of their careers.
The Participation Drop Is Not a Hidden Unemployment Crisis
For months, we have been hearing the nattering nabobs of negativity whine that the unemployment rate looks low only because people have stopped looking for work.
That just ain’t the way it is. While the published labor-force participation rate has declined by 0.5 percent since January and 0.7 percent from a year ago (although it edged up in August)—the labor force is smaller, and the number of people outside it is larger—it’s just not because people are so down that they have given up hopes of finding a job.
Economist Guy Berger pointed out on his MacroMostly Substack that the number of marginally attached workers has not risen. It fell by 132,000 over the past year. The number of discouraged workers fell by 78,000. The broader number of people outside the labor force who say they currently want a job dropped by 600,000.
The rise in nonparticipation therefore appears to be mostly voluntary. And this is not due to some surge in free-loaders or people on public assistance. These are likely retirees, students, caregivers, and parents. An economy that gives more people the choice to work outside the payroll economy is a welcome development rather than something to worry about.
Black Unemployment Has Fallen Sharply
The black unemployment rate fell to 6.0 percent in August, down from 7.6 percent a year ago. That is a large decline. The number of unemployed black Americans fell by 376,000 over the past year, to 1.32 million.
The improvement has occurred among both men and women. The unemployment rate for black men over 20 fell from 7.1 percent to 5.6 percent. The rate for black women declined from 6.8 percent to 5.6 percent.
Not surprisingly, you probably will not see Trump getting much credit for falling black unemployment in the legacy media. It violates their narratives about systemic racism.
One big reason for the decline in black unemployment: less competition with foreigners. The other is simply the full-employment economy creating more opportunities.
Breitbart Business History: The Tariff President Who Remade American Politics
On September 6, 1901, President William McKinley was shot by anarchist Leon Czolgosz while greeting visitors at the Pan-American Exposition in Buffalo. He died eight days later.
McKinley had built his political career around protective tariffs. As chairman of the House Ways and Means Committee, he gave his name to the McKinley Tariff of 1890, which raised average duties on many imported products to nearly 50 percent. As president, he signed the Dingley Tariff, raising rates again. McKinley understood tariffs were key to expanding American industry, maintaining high wages, and providing employment for American workers.
William McKinley and Teddy Roosevelt 1896 campaign poster. The Republican presidential and vice presidential candidates told voters that prosperity had returned because of their high protective tariffs and sound money policy.
The years after the McKinley Tariff became law brought an extraordinary expansion of American industry. Steel production more than doubled by the turn of the century and exceeded 30 million tons by 1913, feeding new railroads, factories, bridges, skyscrapers, and shipyards. Electrical equipment, chemicals, machinery, and automobiles emerged as major industries. By 1913, the United States produced roughly one-third of the world’s industrial output, roughly as much as Britain, France, and Germany combined. This quietly turned the U.S. into the arsenal of democracy, providing the economic might that won two world wars and the Cold War.
The economic achievements made possible by the tariff also led to a political upheaval. McKinley’s victory over William Jennings Bryan in 1896 broke the near-deadlock that had characterized national elections since the Civil War. He assembled a coalition of industrial states, cities, businessmen, professionals, prosperous farmers, and skilled factory workers. He won re-election in 1900 by an even larger margin.
The result was one of the greatest political realignments in American history. Republicans won seven of the nine presidential elections from 1896 through 1928 and controlled Congress for most of that period, interrupted principally by the Woodrow Wilson years. Republican dominance lasted until the onset of the Great Depression, which was brought on and then exacerbated by errant Federal Reserve monetary policy.
Read the full article here
