Job growth slows in August

WASHINGTON — The U.S. job market hit a lull in August, with employers adding a solid but less-thanrobust 156,000 jobs and holding back on meaningful pay raises for most workers.

Yesterday’s jobs report from the government pointed to an economy that is still steadily generating jobs, though more slowly than it did earlier in its recovery from the Great Recession. But with the economy now in its ninth year of expansion and unemployment near a 16-year low, fewer people are looking for work and fewer jobs are being filled.

The hiring data for August had yet to account for the damage from Hurricane Harvey, whose economic impact will be felt in coming months as more people seek unemployment benefits and industrial production will likely reflect the loss of Texas refineries and factories.

Gus Faucher, chief economist at PNC Financial, predicts that job growth in coming months “will weaken substantially” in the wake of Harvey, only to rebound quickly as workers who were temporarily laid off are rehired.

The unemployment rate ticked up from 4.3 percent to a still-low 4.4 percent, the Labor Department said. The government also revised down its estimate of job growth in June and July by a combined 41,000, leaving an average monthly gain this year of a decent 176,000.

One persistent soft spot in the job market has been meager pay raises. Average hourly pay rose just 2.5 percent over the 12 months that ended in August. Wage growth typically averages 3.5 percent to 4 percent annually when unemployment is this low.

Economists note that low unemployment normally results in higher pay raises once employers feel compelled to pay more to attract or keep workers. Most say they think U.S. wage growth will eventually accelerate. But economists have noted that average pay growth has been muted in part because older workers with higher wages are retiring while younger millennials who earn less are being hired.

The August jobs report arrives as Americans have grown more optimistic about the economy. A measure of consumer confidence in August hit its highest level in 16 years, the Conference Board said earlier this week.

Inflation is low. Consumer spending in July rose at its fastest pace in three months. The stock market is up 10 percent so far this year. One measure of factory orders suggests that business investment is increasing.

Overall, hiring this year has averaged 176,000 a month, close to 2016’s average of 187,000. August was the 83rd straight month of job gains.