USA adds 156000 jobs in August, but unemployment rises to 4.4%

Randall Padilla
September 2, 2017

Job growth slowed in August as employers added 156,000 jobs, and the unemployment rate inched up to 4.4 percent, the Labor Department said Friday. BLS cut its July estimate of new jobs created from 209,000 to 189,000 and trimmed the June total from 231,000 new jobs created to 210,000.

Employers in the US added a less-than-expected 156,000 net new jobs.

The leading source of job growth last month was manufacturing, which added 36,000. Among the winners were construction, which added 28,000 jobs, health care, which added 20,200 jobs, and auto plants, which added 13,700 jobs.

With a weaker outlook for employment, the August jobs report adds an additional problem for the Federal Reserve to consider as it weighs a further interest rate rise before the end of the year. And average hourly earnings rose just 3 cents last month to $26.39, down from the 9-cent increase in July.

"With the survey evidence still strong and third-quarter economic growth on course for another decent gain after the second, there is no reason to believe that the modest drop-off in employment growth is the start of a more serious downturn", said Paul Ashworth, chief United States economist at Capital Economics.

The labor force participation rate was unchanged at 62.9%, and the employment-to-population ratio ticked lower, from 60.2% to 60.1%, equal to the June rate.

This means that unemployment, which is already a low 4.4 percent, is set to decline further.

The hiring data for August had yet to account for the damage from Hurricane Harvey, whose economic impact will be felt in coming months as more people seek unemployment benefits and industrial production will likely reflect the loss of Texas refineries and factories. Before this report, the pace of hiring had averaged 184,000 a month this year.

Black Americans' jobless rate rose from 7.4 percent to 7.7 percent as the number of unemployed climbed. Professional and business services led the job gains, with 40,000. Economists generally would like to see wage growth climb at a 3% annual level. Despite ostensibly tighter labour markets, wage growth has been stuck at 2.5% over the last 5 months, similar to the 2.6% average increase previous year.

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