A more modest pace for job, pay growth
August report may put interest rate hike in question
WASHINGTON — Job and pay growth slowed in August, returning to a more modest pace that clouds the prospects for an interest rate hike by the Federal Reserve later this month.
Employers added 151,000 jobs last month, the government said Friday. That is still a healthy number but lower than the 180,000 that analysts were expecting on average and down sharply from revised gains of 271,000 jobs in June and 275,000 in July.
Job gains in those prior two months came after very sluggish hiring in the spring and were not expected to be sustained. Fed and other economists have said about 100,000 to 125,000 new jobs a month are needed to keep pace with the population and labor force growth and hold the unemployment rate steady.
The nation’s jobless rate in August remained at 4.9 percent for the third Employment seekers wait to apply for work at a Florida job fair in July, when 275,000 positions were added. Employers added 151,000 last month, the government said Friday. straight month. Forecasters were looking for it to drop to 4.8 percent.
Fed Chair Janet Yellen last week seemed to be preparing markets for the central bank’s first rate increase since December, citing the nation’s “continued solid performance” in the labor market. But some analysts said the Labor Depart- ment report was not strong enough to push Fed policymakers to raise the benchmark interest rate at the conclusion of their two-day meeting Sept. 21.
“I don’t think it tips the balance toward a rate hike,” said Kevin Logan, chief U.S. economist at HSBC Bank in New York.
Most experts now don’t see a modest Fed rate increase until after Election Day Nov. 8, at its December meeting at the earliest, but others said the report was not so bad as to cause a rethink by Yellen or the Fed.
The latest job growth “is simply not slow enough to derail a rate hike,” said Chris Rupkey, chief financial economist at MUFG
Markets tick up
NEW YORK — U.S. stocks rose Friday as investors found some positive aspects in a middling jobs report. Job growth slowed in August, and investors hope that will convince the Federal Reserve to wait before raising interest rates.
The Dow Jones industrial average climbed 72.66 points, or 0.4 percent, to 18,491.96. The Standard & Poor’s 500 index picked up 9.12 points, or 0.4 percent, to 2,179.98. The Nasdaq composite advanced 22.69 points, or 0.4 percent, to 5,249.90. Union Bank in New York.
About 44,000, or 29 percent, of the jobs added last month were in retail and the hotel and restaurant sectors. Most of the new jobs last month were in professional services and financial businesses and sectors such as health and education. Manufacturing and construction industries shed jobs, however.
The economy is now in its eighth year of growth since the Great Recession, but it has been slow by historical standards. And one clear disappointment has been on the pay front. August was another letdown.
Average hourly earnings of all private-sector workers rose just 3 cents last month from July, to $25.73. That was up 2.4 percent from a year earlier but the weakest showing since March and down from an annual pace of 2.7 percent in July.
Economists have been waiting for a bigger, sturdier pickup in earnings as the job market has tightened, but the smaller-than-expected gains suggest there are many more jobless workers than the 7.85 million people on the official unemployment rolls. A long-running trend of low productivity growth and, more recently, weakening corporate profits are not helping either.
Including the August numbers, job growth this year has slowed to an average of 181,500 a month, from 229,000 last year and 251,000 in 2014.