The U.S. economy added 130,000 jobs in August, falling short of economists’ estimates of 170,000, according to MarketWatch.
Here are some of the highlights from the report.
1. Tepid job growth
Total nonfarm payrolls increased by 130,000 in the month of August, though private sector hiring only accounted for 96,000 of those new jobs.
Washington Post: “Hiring in August was boosted by the federal government adding part-time workers for the 2020 U.S. Census. Without the addition of those temporary jobs, the new data reveal private sector companies added only 96,000 jobs, the weakest in many months.”
New York Times: “In August, the private sector added 96,000 jobs, weaker than the pace so far in 2019, and an indication that businesses are becoming a little more reluctant to add head count. The report also revised down job gains for June and July by a total of 20,000.”
CNBC: “With the previous June and July reports revised lower as well, monthly job growth in the U.S. has slowed to just 158,000, compared with 223,000 per month a year ago.”
2. Unemployment stays steady
Despite disappointing job growth, the unemployment rate in August held steady at 3.7%, while the labor force participation rate continued to grow and wages crept upward.
Fox Business: “The unemployment rate remained steady at 3.7 percent, near a 50-year low, while the labor force participation rate was little changed at 63.2 percent.”
MarketWatch: “The amount of money the average worker earns shot up 11 cents to $28.11 an hour, keeping the increase over the past year at a healthy 3.2%. Wage gains look even stronger over the past three months, suggesting that inflation could creep higher in the months ahead if that keeps up.”
Bloomberg: “Higher wages and looser hiring requirements are drawing more Americans in from the sidelines. The participation rate, or share of working-age people in the labor force, increased to 63.2%, while the employment-population ratio rose to a 10-year high of 60.9%, both up 0.2 percentage point from the prior month.”
3. The Fed will most likely cut interest rates
The lukewarm August jobs report increases pressure on the Federal Reserve to cut interest rates for the second time this year later this month.
Yahoo! Finance: “Investors cheered and stock futures rose as the weaker-than-expected jobs report all but cemented the possibility of a second interest rate cut.”
New York Times: “Analysts expect the Fed to cut its benchmark rate by another quarter-point when policymakers meet in two weeks. But some traders had thought that the central bank could opt for a half-point reduction. Friday’s report strengthens the case for a rate cut this month, although it wasn’t weak enough to suggest that the policymakers will feel compelled to go with the bigger reduction.
Fox Business: “The jobs report will likely give the Federal Reserve justification to lower short-term interest rates by a modest 25 basis points, rather than making a deeper cut, when policymakers meet in mid-September.”