Photo by Essow K
The U.S. labor market showed signs of cooling in August, with employers adding 142,000 jobs, falling short of economists’ expectations. The unemployment rate, however, edged down to 4.2% from July’s 4.3%, according to the latest report from the Bureau of Labor Statistics released on Friday.
The job growth in August represents a modest increase from July’s revised figure of 114,000 jobs but remains below the average monthly gain of 202,000 jobs seen in the year prior to August. This slower pace of hiring suggests a gradual deceleration in the labor market, which has remained resilient despite economic headwinds.
Key sectors contributing to job growth included healthcare and social assistance, food and beverage services, and construction. However, the manufacturing sector faced challenges, shedding 24,000 jobs in August.
Wage growth exceeded expectations, with average hourly earnings increasing by 0.4% from the previous month and 3.8% year-over-year. This uptick in wages, coupled with a slight increase in the average workweek, complicates the narrative of decreasing labor demand.
The labor force participation rate for prime-age workers (25-54 years old) saw a minor dip to 83.9% in August from July’s 84%, which had been the highest level since 2001.
Revisions to previous months’ data painted a cooler picture of the job market. June and July’s employment figures were adjusted downward by a total of 86,000 positions, resulting in a three-month average of 116,000 new jobs.
The August jobs report arrives at a crucial time for Federal Reserve policymakers, who are weighing the need for further interest rate adjustments. Fed Chair Jerome H. Powell has indicated a desire to prevent further erosion of job opportunities, suggesting that the central bank may consider lowering interest rates in mid-September.
As the labor market shows signs of moderation, economists and policymakers will be closely monitoring future reports to gauge the overall health of the U.S. economy and inform monetary policy decisions.
Sources:
[1] https://www.bls.gov/news.release/empsit.nr0.htm
[2] https://www.actalentservices.com/en/insights/market-intelligence/actalents-us-labor-market-and-economy-report-july-2024
[3] https://www.cbsnews.com/news/jobs-report-today-august-2024-unemployment-rate/
[4] https://www.bls.gov/news.release/pdf/empsit.pdf
[5] https://www.cnbc.com/2024/09/06/jobs-report-august-2024.html
[6] https://www.nytimes.com/2024/09/06/business/economy/jobs-report-august-2024.html
[7] https://www.bloomberg.com/news/live-blog/2024-09-06/us-employment-report-for-august
[8] https://www.reuters.com/markets/us/us-job-growth-misses-expectations-august-unemployment-rate-slips-42-2024-09-06/
[9] https://www.jpmorgan.com/insights/outlook/economic-outlook/jobs-report-august-2024
[10] https://www.morningstar.com/economy/forecasts-august-cpi-report-show-inflation-easing-further
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