United States nonfarm employment climbed by 151,000 last month, compared with a median forecast of 180,000 in a Bloomberg survey. Center for American Progress Economist Kate Bahn released the following statement today on the August 2016 employment situation figures from the U.S. Bureau of Labor Statistics.
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The US labor force participation rate, the percentage of the US population in the workforce or actively seeking a job, remained unchanged at 62.8%.
Economists surveyed by Reuters had estimated that payrolls might rise to 180,000 in August while the unemployment rate might slip to 4.8 percent.
Moreover, missed expectations for average hourly earnings – up 0.1% in August versus 0.2% expected and 0.3% in July – indicate that inflation would not be bumping up in a hurry. That is a slight slowdown from the prior month’s annual gain, but still well outpaces mild inflation.
The U.S. central bank’s Federal Open Market Committee will meet for two days on September 20 and 21.
FED EXPECTATIONS: Some analysts were saying before the report that a strong result would make a rate hike from the Fed more likely in September. The net difference over the two months was 1,000 fewer jobs than initially reported. That could in theory help stock markets, which are generally boosted by lower rates, though investors will be weighing that against the evidence that the underlying economy is not as strong as hoped.
June and July employment reports were extremely positive, and wage growth seemed to be picking up.
As consumer spending ticked up last month, so too did consumer confidence as measured by the Conference Board. NextEra Energy gained $1.83, or 1.5 percent, to $122.83 and American Electric rose 55 cents to $64.96.
But there are worrisome signs outside the job market. USA crude settled up $1.28, or 2.97 percent, at $44.44 a barrel. Business investment has decreased this year, corporate profits are soft and threats from economic weakness overseas still loom. Most of the new jobs last month were in higher-wage professional services and financial businesses and other sectors where the pay is more mixed, such as health and education services.
The August slowdown in U.S. jobs creation follows stronger performances in June and July when a combined 546,000 jobs were added.
Employers added 151,000 jobs last month, the government said Friday.
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Britain’s central bank cut interest rates to the lowest level on record to ward off the negative effects of Britain’s decision to leave the European Union earlier this summer. A broader measure of unemployment that includes discouraged and underemployed workers stands at 9.7 percent. “This signals tightening labor markets”. That’s left investors somewhat anxious about the health of the USA economy and the job market. “Until more people are participating, I don’t see the inflationary pressures, and our data says we don’t expect to see much over the next 12 months”.
