But Lacker said the weaker pace of hiring still left the job market on a strengthening path and the case for higher rates would only grow stronger unless job growth slowed “significantly in the months ahead”.
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A trader works on the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York, U.S., August 30, 2016. Revisions subtracted a net 1,000 jobs from overall payrolls in the previous two months, as June’s increase was cut to 271,000 from 292,000.
The for-hire truckload segment added 400 jobs in July and the LTL segment added 900 jobs in July, the latest month for which employment data is available for those segments. The Fed next meets on September 20-21. That’s 2.3 percentage points short of the pre-recession average – a gap of 2.9 million jobs.
The U.S. employment data for August released Friday was not strong enough to decisively tip the scales in favor of an imminent rate hike, though the Federal Reserve may not have taken further tightening this month off the table entirely.
“The jobs data is not weak enough to get people to give up on their Fed view”, said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in NY.
Forecasters has hoped for an even lower unemployment rate than 4.9 percent. Its gauge in August rose to 101.1 from a revised 96.7 in July, beating expectations for a slight rise to 97.
Goldman Sachs Group Inc. economists said they see a 55 per cent probability of a rate hike this month, and Janus Capital’s Bill Gross also said the Fed is likely to move in September.
151,000 jobs added in August vs est.
Economists at Fathom Consulting said the “lukewarm” payrolls report left rate-setters at the Federal Open Market Committee (FOMC) with a dilemma.
In other news, the average workweek for all employees on private nonfarm payrolls decreased to 34.3 hours in August.
The analysts at Econoday pointed out, “Earnings are very soft in this report, up only 0.1 percent in the month”, so that wages over a year rose 2.4 percent, a slowdown from July. That probability rises to 63 percent by year end. The jobless rate and labour participation rate held steady, while wage gains moderated.
“Nobody understands the inflation process, including the Fed”, said Torsten Slok, chief global economist at Deutsche Bank in NY. We are committed to a raising wages agenda, and we will fight tirelessly to elect candidates who support policies that pay family-sustaining wages and lead to economic stability. The employment report “solid but not the stellar numbers needed to convince the market that September is in play”.
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The health of the labor market is sure to be at issue in the USA presidential election. The Institute for Supply Management’s gauge of US manufacturing activity dropped more than expected, falling into contraction territory, while employment in construction and manufacturing shed a combined 20,000 jobs last month, and the average workweek in manufacturing declined by 0.2 hour to 40.6 hours.
