U.S. labor market cools again in August, adding 142,000 jobs
Add Axios as your preferred source to
see more of our stories on Google.
The U.S. economy added 142,000 jobs in August, while the unemployment rate edged slightly lower to 4.2% from 4.3%, the Labor Department said on Friday.
Why it matters: A slowing labor market is a pivotal factor that will help the Federal Reserve determine the size of a highly anticipated interest rate cut later this month.
- The August figures came in below expectations of 161,000 job gains.
- The new report also shows notable revisions for months past: The economy added just 89,000 jobs in July—25,000 fewer than initially thought.
- June's gains were revised down by 61,000 to 118,000.
The intrigue: The economy continues to add jobs, but at a notably cooler rate. The unemployment rate is historically low, but has steadily risen over the past year.
The big picture: Fed chair Jerome Powell signaled last month that the central bank will almost certainly cut interest rates for the first time since 2020 at the two-day policy meeting that begins Sept. 17.
- That will come as inflation continues to recede, but the labor market in recent months has displayed signs of weakness. Powell said that the Fed does not welcome further weakening in the jobs market.
- The Fed could cut rates by a quarter-percentage point or a super-sized half-percentage point.
- Macro-watchers believe that the Fed might go bigger if they believe the labor market is cooling more than they would like.
Zoom in: Job gains were largely concentrated in two sectors—construction, which added 34,000 jobs, and health care, which gained a similar number of payrolls.
- Average hourly earnings, a measure of wage growth, rose 0.4% last month. Over the past 12 months, average hourly earnings are up 3.8%.
Editor's note: This is story was updated with additional details from the report.
