September 2, 2017
Job creation in the US slowed in August after a stronger start to the summer, and the unemployment rate ticked up from a 16-year low. A report Friday from the Bureau of Labor Statistics showed that the US economy added 156,000 jobs in August, fewer than economists had expected. The unemployment rate rose to 4.4% from 4.3%. Economists had forecast that the pace of job creation slowed to a net total of 180,000 nonfarm payrolls, according to Bloomberg. The BLS also subtracted 41,000 jobs from its initial estimate of the prior two months. It noted that Hurricane Harvey had "no discernible effect" on the August jobs numbers because it conducted the survey for its report before the storm. The hurricane's impact is likely to show up in a few weeks in initial filings for unemployment claims.
Manufacturing stuck out as a strong sector last month, adding 36,000 payrolls. Retail hiring increased for a second straight month — but only by 800 jobs amid mass store closings. Wage growth was expected to pick up slightly but remains sluggish. That's partly because baby boomers are retiring and being replaced by young workers with low-paying jobs. Average hourly earnings rose 0.1% month-on-month, softer than expected, and 2.5% year-on-year, both weaker than expected. The lack of wage growth is puzzling since the unemployment rate is so low, and it may give the Federal Reserve some hesitation in raising interest rates. The Fed meets later this month to decide whether to raise borrowing costs, though economists don't expect it to hike.
