U.S. job growth slowed in August, but hiring steady
U.S. job growth remained steady in August, although employers pulled back slightly on hiring,
The U.S. economy added 151,000 jobs last month, the Labor Department said Friday. The unemployment rate remained unchanged at 4.9 percent.
Analysts surveyed by data provider FactSet had forecasts that employers added 180,000 in August.
Among major job sectors, employment in restaurants and bars showed the greatest payroll gains. Also showing growth were social services, financial services and health care, while the mining industry continued to shed jobs.
“On the whole, this morning’s strong [August] employment report, despite the slower pace of job gains, indicates that labor market health remains intact and that therefore economic activity remains solid,” Barclays Research analysts said in a client note.
The jobs report is being closely watched by economists and investors alike, as it may offer some clues as to when the Federal Reserve will hike interest rates. Fed officials have noted the economy’s improvement, with Fed chief Janet Yellen saying in a speech last month that the case for a rate increase “has strengthened in recent months.”
Yet most analysts and investors predict the Fed will stand pat at its meeting later this month and postpone any rate hike until December. That would be a full year after the Fed first raised the short-term rate it controls after leaving it pegged at nearly zero for seven years.
Jim O’Sullivan, chief economist with High Frequency Economics, told investors that the latest labor report “probably helps the case of those Fed officials arguing for holding off on another rate hike pending more clarity.”
Inflation remains far below the Fed’s target of 2 percent, potentially delaying higher rates. Worker pay also has yet to show much growth. Average hourly earnings rose 3 cents last month to $25.73, an annualized rate of 2.4 percent. After previous recessions, wage growth has typically hit at least 3 percent.
The average number of hours employees work per week is also ticking down. That could point to a slowing job market, noted economist Dean Baker, co-director of the Center for Economic and Policy Research.
The labor force participation rate remained unchanged at 62.8 percent.
The Labor Department revised the June payroll gains down by 21,000 to 271,000; July’s numbers were revised up 20,000 to 275,000.