Job Growth Slower Than Expected in August

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Job growth was slower than economists were expecting in August as the labor market continues to show signs of weakening, according to the latest Bureau of Labor Statistics report.

  • The U.S. economy added 142,000 jobs in August. While an improvement over July’s revised total of 89,000, this was the fifth lowest month of job gains in the past three years.
  • Revisions: June and July’s job numbers were revised downward significantly—June by 61,000 to 118,000 and July by 25,000 to 89,000—highlighting weaker momentum than previously thought.

Unemployment: The unemployment rate dipped slightly to 4.2%, down from 4.3% in July. However, it’s still the second-highest level in the last two and a half years.

Zoom In: Construction was a standout, adding 34,000 jobs in August—well above its 12-month average gain of 19,000. Healthcare contributed 31,000 new jobs, while social assistance added 13,000.

  • On the flip side, manufacturing struggled, losing 24,000 jobs in August.

Wages: Average hourly earnings for all private nonfarm payroll employees rose 0.4% in August to $35.21, outpacing the 0.2% rise seen in July. Year-over-year wage growth now stands at 3.8%, a slight uptick from July’s 3.6%, but still the second lowest in three years.

What They’re Saying: Nick Timiraos of the Wall Street Journal noted that the report did not resolve the 25 or 50 basis point cut debate. “There was a chance the jobs report would provide an obvious signal on the size of the first cut, and futures-market pricing would move to 90% right away for either 25 or for 50. Instead, this report doesn’t neatly resolve the tactical question, and the pricing is at 50-50. The headline figures weren’t bad enough to make 50 the base case but, in light of the revisions, it wasn’t good enough to convincingly and cleanly douse speculation on a larger cut.”

Reaction: Bond markets rallied with the 10-year yield falling to 3.68% immediately after the numbers come out.