Despite the numerous positive reports published in the last few weeks, the Labor Department reported a low hiring pace in August. Employers added 14200o, falling short of the 200000 gain projected by economists. Furthermore, while the unemployment rate fell by 0.1 last month to 6.1 percent, figures suggest this decline is more likely due to people dropping out of the workforce, rather than obtaining employment. Michael Gapen, senior US economist with Barclays suggests,
[This data] presents a reality check versus other data, which showed more significant economic momentum heading into the third quarter.”
However, other economists suggest this is likely just a bad month, rather than a turn for the worst.
This looks like a breather, rather than a fundamental downshift,” said Omair Sharif, senior United States economist at RBS.
Wages still grew in August by 0.2 percent, while the average workweek remained unchanged at 34.5 hours. The August report takes pressure of the policy makers at the Fed who have been waiting to adjust short-term interest rates from their current near-zero value.
Read more here- “U.S. Job Growth Slips in August after Months of Bigger,” (Nelson Schwartz, The New York Times)