(USA) The US economy added at least 187,000 new jobs in August, while unemployment rate ironically jumped to 3.8% even as the labor market continued to show signs of cooling, according to data from the Bureau of Labor Statistics on Friday, VERY SERIAL reports.
Job growth in the United States accelerated in August, although the unemployment rate surged to 3.8%, while wage increases slowed down.
This data suggests that the labor market is showing signs of easing, reinforcing expectations that the Federal Reserve will not raise interest rates this month.
The Labor Department’s closely monitored employment report, released on Friday, also revealed that 187,000 people entered the job market in August, pushing the participation rate to its highest level in 3.5 years.
Concerns of eonomic slowdown draw workers back
It appears that concerns about an economic slowdown are enticing people back into the labor market.
The report also revised down job growth figures for June and July by a combined total of 110,000 jobs. This suggests that there may have been business closures that were not previously captured in the data.
Earlier this week, it was reported that job openings had dropped to their lowest level in almost 2.5 years in July.
The labor market is slowing down in response to the Federal Reserve’s significant interest rate hikes aimed at cooling demand in the economy.
Economist Christopher Rupkey commented on the report, saying, “This is probably the final nail in the coffin for the chances of another rate hike by the Fed in September.”
Nonfarm payrolls increased by 187,000 jobs in August, up from 157,000 in July. Over the past three months, job growth has averaged 150,000 per month, a significant decline from the 238,000 per month in the three months through May.
While economists had anticipated an increase of 170,000 jobs in August, the actual employment gains remain well above the level needed to accommodate the growing working-age population.
The data also indicated underlying strength in the labor market, with the share of industries adding jobs reaching its highest point in seven months.
However, a strike by Hollywood actors resulted in a loss of 17,000 jobs in the motion picture and sound recording industries in August, while the bankruptcy of trucking firm Yellow led to 37,000 job losses in the truck transportation industry.
Excluding these one-time factors, payrolls would have increased by approximately 241,000 in August.
Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock, commented on the situation, saying, “This is still not the picture of the labor market we would expect to see if the economy were in danger of decelerating dramatically in the short term, although without question there are signs of moderation.”
Following the release of the report, stocks on Wall Street initially rose but then traded mostly lower. The dollar strengthened against a basket of currencies, and U.S. Treasury yields also increased.