U.S. job creation falls short of expectations in August; unemployment rate falls to 4.2%

U.S. job creation fell short of expectations in August, but the decline in the unemployment rate to 4.2% suggests that the orderly labor market slowdown has continued and is unlikely to warrant a major interest rate cut in the near future. Book this month.

The U.S. economy added 142,000 jobs last month, after a downwardly revised figure of 89,000 in July, the Labor Department said Friday.

Economists polled by Reuters forecast 160,000 jobs, up from 114,000 in July as previously reported. Estimates ranged from 100,000 to 245,000 jobs.

The lower-than-expected result probably does not signal a worsening of labor market conditions.

August data tends to start out weaker than the estimate and recent trend, before being revised higher. Hiring typically picks up in the education sector, as predicted by the government’s model to eliminate seasonal fluctuations in the data.

The start of the new school year, however, varies from country to country, which can throw off the so-called seasonal factors. Initial counts in the August report have been revised upward in 10 of the last 13 years. Layoffs remain at historically low levels.

The decline in the unemployment rate came after four consecutive monthly increases that brought it close to a three-year high of 4.3% in July.

Average hourly earnings rose 0.4% in August after falling 0.1% in July. Wages rose 3.8% from a year earlier, after rising 3.6% in July. Still-strong wage growth continues to support the economy through consumer spending.

Source: Terra

Rose

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