US unemployment rate rises, wage growth cools as labor market slows
By Lucia Mutikani
WASHINGTON (Reuters) — U.S. job growth picked up in August, but the unemployment rate jumped to 3.8% and wage gains moderated, suggesting that labor market conditions were easing and cementing expectations that the Federal Reserve will not raise interest rates this month.
The closely watched employment report from the Labor Department on Friday also showed 736,000 people entered the job market last month, boosting the participation rate to the highest level in 3-1/2 years.
Employment gains in June and July were revised down to show 110,000 fewer jobs than previously reported. The report followed on the heels of news this week that job openings dropped to the lowest level in nearly 2-1/2 years in July.
The labor market is slowing in response to the U.S. central bank's hefty rate hikes to cool demand in the economy.
«This is the Fed's dream jobs report,» said Bill Adams, chief economist at Comerica (NYSE:CMA) Bank in Dallas.
Nonfarm payrolls increased by 187,000 jobs last month. That was sharply down from the monthly average gain of 271,000 over the past 12 months.
The economy needs to create roughly 100,000 jobs per month to keep up with the increase in the working-age population.
Economists polled by Reuters had forecast nonfarm payrolls would increase by 170,000 jobs last month, with estimates ranging from 40,000 to 278,000. A strike by about 16,000 Hollywood actors and the Yellow (OTC:YELLQ) trucking bankruptcy in early August, which left about 30,000 workers unemployed, had led economists to anticipate slower job growth in August.
A tendency for the initial payrolls count to be weaker in August before being subsequently revised higher in September and October also factored into economists'
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