Nonfarm payrolls rose by a seasonally adjusted 151,000 last month, the Labor Department said Friday.
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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”.
The U.S. Department of Labor released its jobs report for August on Friday, which said slightly more than 150,000 jobs were added for the month.
There are some troubling signs in this month’s report, including the lack of growth in manufacturing and construction jobs and unacceptably slow wage growth.
Members of the Federal Reserve’s policy-making body, including Chair Janet Yellen, may be swayed by the job-market slowdown when they make their next decision on the benchmark federal funds rate at a meeting scheduled for September 20-21.
Fed officials have noted the economy’s improvement, with the unemployment rate at almost healthy levels.
Paul Ashworth of Capital Economics says the Fed will likely “wait another couple of months”, to make sure that the numbers rebound in September, and that the August numbers are revised higher.
The dollar’s reaction reflected low expectations that the Fed would hike in September, despite the more bullish tone taken recently by Fed officials.
Several factors could be temporarily suppressing the August hiring data, such as late reports from many companies because staff levels are low in summer. But wage growth is expected to be moderate.
A report from the Institute of Supply Management (ISM) on Thursday showed USA factory activity contracted for the first time in six months in August as new orders and production tumbled.
“This mixed jobs report puts the Fed in a tricky situation”. Furthermore, this print should maintain the confidence of most FOMC members in the outlook. The last rate hike in December 2015 gave banks a decent boost to their net interest margins. Over the past five years, it has typically been revised higher by about 70,000. For the year, wages are rising at a pace that is perhaps a full 1.5 percent faster than anticipated inflation.
Of the 13 banks forecasting a rate rise this year, just three – Goldman Sachs, BNP Paribas and Societe General – see it occurring as early as this month.
US stock markets reacted favorably to the report.
Long-term mortgage rates tend to track the yield on 10-year Treasury notes, which rose to 1.58 percent Wednesday from 1.56 percent a week earlier. Average hourly earnings were up 0.1% in August after a 0.3% rise in July. The health-care and social-services sector added 36,100 jobs.
The unemployment rate and labor force participation rate held steady at 4.9% and 62.8%, respectively.
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Mortgage giant Freddie Mac said Thursday the average for the benchmark 30-year fixed-rate mortgage was 3.46 percent, up from 3.43 percent last week.
