In August, the U.S. job market grew at a slower pace than anticipated, adding 142,000 positions compared to the forecasted 161,000. This figure represents a drop from July’s 89,000 new jobs.
The unemployment rate fell slightly to 4.2%, while the workforce expanded by 120,000, reducing the jobless rate by 0.1 percentage points. However, the labor force participation rate remained unchanged at 62.7%.
An alternative unemployment measure, including those not actively seeking work, rose to 7.9%, its highest since late 2021.
Markets had a muted reaction to the report, with stock futures and Treasury yields showing little movement. Notably, job figures for the previous two months were revised downward, with July’s numbers reduced by 25,000 and June’s by 61,000.
Construction led job gains with 34,000 new positions, followed by healthcare at 31,000 and social assistance at 13,000. Manufacturing, however, lost 24,000 jobs.
Wages increased by 0.4% from the previous month and 3.8% year-over-year, surpassing estimates. Average work hours also ticked up to 34.3.
This data comes as the Federal Reserve prepares for its September 17-18 meeting, with markets expecting a potential rate cut, though the extent remains uncertain.
JPMorgan Chase CEO Jamie Dimon recently raised concerns about the U.S. economy, citing the potential impact of inflation and increasing deficits.
Goldman Sachs strategists, led by Christian Müller-Glissmann, are forecasting greater resilience in the U.S. stock market than many investors expect, suggesting a low probability of a severe recession.
Recent indicators suggest that the U.S. may avoid a recession in 2024, reversing earlier concerns.
US inflation fell to 2.5% in August, setting the stage for the Federal Reserve to consider cutting interest rates at its meeting next week.