US job growth picks up in August; wage rise slows

The american economy added more jobs than expected in August, but the rate increase unemployment to 3.8% and the moderation in wage growth pointed to a relaxation in labor market conditions, which could reinforce expectations that the Federal Reserve don’t raise interest rates this month.

Nonfarm payrolls increased by 187,000 jobs last month, the Labor Department reported Friday. Data for July was revised down to show 157,000 jobs added instead of the 187,000 previously reported.

The economy needs to create about 100,000 Job positions per month to keep up with the growth of the working-age population.

Economists polled by Reuters had forecast a rise in nonfarm payrolls of 170,000 last month. The Hollywood actors’ strike and the bankruptcy of a major trucking company had led economists to anticipate slower growth in the employment in August.

The trend of the initial payroll count to be weaker in August before being revised higher in September and October also weighed on economists’ expectations.

The Labor Department’s Bureau of Labor Statistics, which produces the employment report, had reported that nearly 18,000 workers were on strike during the period it collected data for the August report, including 16,000 members of the Screen Actors Guild-American Federation of Television and Radio Artists.

Meanwhile, the Yellow Corp transportation company filed for Chapter 11 Bankruptcy in early August, leaving some 30,000 workers unemployed.

Although the demand for labor is slowing, some service businesses such as restaurants, bars and hotels remain desperate for workers. Job offers fell in July to the lowest level in almost two and a half years, the government reported this week.

The unemployment rate it increased to 3.8% from 3.5% registered in July, due to the increase in the active population. It remains below the US central bank’s latest median estimate of 4.1% for the fourth quarter of this year.

Since March 2022, the Federal Reserve has raised its official interest rate by 525 basis points, to the current range of 5.25%-5-50%.

Prior to the report, financial markets expected the fed to keep its benchmark interest rate unchanged at its September 19-20 policy meeting, according to CME Group’s FedWatch tool.

With the relaxation of working market, wage growth slowed down a bit. The average hourly wage rose 0.2%, after rising 0.4% in July. In the 12 months through August, wages rose 4.3% after growing 4.4% in July.