US job gains miss expectations in August, though unemployment down
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The world’s biggest economy added an estimated 142,000 jobs in August, an increase from July’s figure.
PHOTO: AFP
WASHINGTON - US hiring bounced back in August but missed expectations while the jobless rate crept down, according to government data released on Sept 6, paving the way towards central bank rate cuts in the coming weeks.
The world’s biggest economy added an estimated 142,000 jobs in August, an increase from July’s figure which was revised notably lower to 89,000, said the Department of Labour.
The August number was below economists’ expectations of 165,000, according to a Briefing.com consensus forecast.
The unemployment rate declined slightly from 4.3 per cent to 4.2 per cent, a shift that should assuage some policymakers’ fears.
But overall, the figures reaffirm perceptions of a cooling labour market – with job gains in June revised significantly downwards as well.
This is likely to give the Federal Reserve a reason to begin lowering rates from current decades-high levels.
Congressman Brendan Boyle, a top Democrat on the House Budget Committee, said in a statement after the data release that the US economy has “made significant progress on inflation, and now the Fed must secure this progress by lowering interest rates” at September’s policy meeting.
‘Losing steam’
Analysts have been eyeing the jobs market as high interest rates bite and inflation cooled, with some arguing that the Fed has waited too long to lower the benchmark lending rate.
How well the jobs market holds up could affect the size of Fed rate cuts, following its gathering on Sept 17 and 18.
“The large downward revision to payroll gains in the prior two months and the continued narrow concentration in payroll advances underscore that the labour market is losing steam rather quickly,” said Nationwide chief economist Kathy Bostjancic.
This leaves open the possibility of larger 50 basis points rate cuts in November and December, she said.
Average hourly earnings rose more than expected in August, by 0.4 per cent to US$35.21 (S$45.70), said the Department of Labour.
From a year ago, wage growth was 3.8 per cent up – an acceleration from before also.
“A lot of the macroeconomic indicators lately have been sending mixed messages about the overall economy, but consistently weak messages about the labour market,” said ZipRecruiter chief economist Julia Pollak.
“My overall sense of the labour market is that it’s slowing and slackening, and that job growth is narrowing to just the government and healthcare,” Ms Pollak said.
She added that “private-sector hiring outside of healthcare has become unusually slow”. AFP
