US job growth slows more than expected in August
Job growth was weaker than expected in August, but wage growth held steady, signaling that the economy continues to expand albeit at a slower pace.
The US economy added 130,000 jobs in August — including the temporary hiring of 25,000 workers to prepare for the 2020 Census — a number that fell short of the expected 160,000 and well below the average monthly gain of 223,000 last year, according to the Labor Department.
But despite the apparent slowdown, labor force participation — a measure of people working or seeking work — edged higher, rising to 63.2 percent in a signal that people remain optimistic about their jobs prospects.
The unemployment rate also held steady at 3.7 percent — near a 50-year low — for the third month in a row, while the number of unemployed persons remained unchanged at 6.0 million.
Average hourly earnings, meanwhile, are up 3.2 percent over the past year.
“Hiring in the US is slowing, but not stopping,” Bankrate.com senior economist Mark Hamrick wrote Friday. “That should help to contain fears of a recession in the near-term, which have been percolating since last December.”
Some economists attributed the slower hiring pace to Trump’s trade war with China, saying uncertainty over its outcome has delayed hiring in tariff-sensitive industries.
Others suggested that, with the unemployment rate near its lowest level in five decades, employers are having trouble finding qualified employees.
Mike Bitar, managing director of global search firm Protis Global, said he has heard grumblings about a looming recession but has yet to observe any slowdown in hiring. For companies that lack training capabilities, new hires with enough experience to hit the ground running are commanding salary premiums between 10 percent and 15 percent, Bitar said.
“That’s what clients are paying for what we call plug-and-play managers,” he said.
Employment in professional and business services continued its upward trend, with a total of 37,000 new hires.
Health care added 24,000 jobs, bringing its new-job total to 392,000 over the past 12 months, while employment in financial activities increased 15,000.
On the downside, retail lost 11,000 jobs in August, causing payrolls in the sector to fall for the seventh consecutive month — its longest losing streak since 2009.
Most analysts considered August’s jobs report the perfect setup for a follow-up to the rate cut the Fed implemented at its last meeting — the first in more than a decade.
“A weak payrolls print all but cements a Fed rate cut in two weeks,” said Sal Guatieri, senior economist at BMO Capital Markets, wrote in a note to clients.