The official unemployment rate, based on a separate survey of households, remained at 4.9 percent.
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The weaker pace may make it less likely that the Federal Reserve will raise short-term interest rates at its next meeting September 20-21.
That’s left investors somewhat anxious about the health of the us economy and the job market.
“It reduces the likelihood that the Fed will raise rates in September, but the labor market remains strong enough to support a rate hike in December”, said John Silvia, chief economist at Wells Fargo Securities in Charlotte, North Carolina.
The August unemployment rate was 4.9%, matching the level of last month. That probability rises to 63 percent by year end.
Federal Reserve chairman Janet Yellen last month declared that the case for another interest rate rise in the USA has “strengthened” – but would not be drawn on when such a move would take place. Still, they are enough to lower the jobless rate over time.
But yields reversed that drop later in the session, with two-year yields last little changed at 0.794 percent and 10-year yields last at 1.601 percent, compared with a 10-year yield of 1.570 percent late on Thursday.
“Equity markets are going to give the Fed at least one rate increase but if they start to perceive a series of hikes coming, and coming sooner than later, that is when equity markets will get a little nervous here”. As a result, analysts said the weaker jobs number would probably keep interest rates on hold for now.
But the Democratic National Committee said the employment report was further proof of the sound economic policies of the Obama administration.
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The step-down in employment growth comes after the economy created a total of 546,000 jobs in June and July.
With the labor market near full employment and the economy’s recovery from the 2007-09 recession showing signs of aging, a slowdown in job growth is normal.
Over the last several years, the government’s August payrolls estimates have been weak prior to upward revisions.
For Goldman Sachs and Societe General, that represented an acceleration in their view of the Fed’s next tightening move, even as the US employment report for August came in well below target.
The US central bank is also closely watching wage growth, which slowed in August, according to the latest figures.
Hourly wages barely increased in August and have risen just 2.4 percent in the past year, slightly lower than the previous month’s pace.
– Silver for December delivery rose 2.2 percent to $19.366 an ounce on the Comex.
Americans worked fewer hours last month, with the average workweek dipping to 34.3 hours from 34.4 hours in July.
Treasuries prices initially rallied on the U.S.jobs data, with two-year yields US2YT=RR falling to their lowest in 10 days of 0.746 percent and benchmark 10-year yields hitting a one-week low of 1.543 percent US10YT=RR.
For the week, the S&P 500 rose 0.5 percent to mark its first positive week in three, while the FTSEurofirst 300 posted its second straight week of gains and its biggest since mid-July, at 1.9 percent. And overall confidence has touched an 11-month high.
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The Atlanta Fed is forecasting gross domestic product rising at a 3.2 percent annual rate in the third quarter. Retail sector employment increased by 15,100 jobs and payrolls in the leisure and hospitality sector rose 29,000. Temporary help firms shed 3,100 positions.
