Employers added 142,000 jobs in August, reflecting a rebound from weak hiring in the prior month that unsettled markets and raised concerns about cracks in the U.S. economy.
Still, the number was lower than the 160,000 new jobs forecast by economists surveyed by FactSet. Unemployment eased slightly to 4.2%, in line with expectations, according to data released Friday by the Bureau of Labor Statistics.
In July, employers added 114,000 jobs, far fewer than economists had forecast, while the unemployment rate jumped to 4.3%.
Wall Street is closely watching today’s jobs report for clues for how it might influence the Federal Reserve’s next rate decision, which is scheduled for September 18. Economists are unanimous in predicting the central bank will shave its benchmark rate at that meeting, but are split on whether the rate could be shaved by 0.25 percentage points or 0.5 percentage points, with many foreseeing a bigger cut if the job market shows additional signs of weakness.
Fed Chair Jerome Powell last month signaled that bank officials are planning for a September cut, saying “the time has come” for the central bank to adjust its monetary policy given signs that inflation continues to cool. He didn’t disclose the size of the expected cut, however.
“Fed officials have gained more confidence that inflation is on a sustainable path back to its 2% objective and are now increasingly focused on downside risks to the labor market,” noted Nancy Vanden Houten, lead U.S. economist at Oxford Economics, in a September 5 report.
She added, “Overall, the labor market is still relatively healthy, mainly because layoffs remain low, but appears increasingly vulnerable to a scenario where rising unemployment triggers a cycle of reducing spending and greater job losses.”
— This is a breaking story and will be updated.
