US unemployment rate up 3.8% in August; nonfarm payrolls increase by 1.87 lakh, beats Street estimates

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jobless or unemployment rate climbed to 3.8 per cent - the highest level since early 2022. More people entered the labor force from 3.5 per cent in July. It remains below the US central bank's latest median estimate of 4.1 per cent by the fourth quarter of this year.

Healthcare showed the biggest gain by sector, adding 71,000. Other top sectors were leisure and hospitality (40,000), social assistance (26,000), and construction (22,000). Transportation and warehousing lost 34,000 and information declined by 15,000.

The Labor Department data showed that average hourly earnings in August rose 0.2 per cent, slower than the month before. "Employment continued to trend up in health care, leisure and hospitality, social assistance, and construction," the department said. The number of "new entrants" among the unemployed, referring to people with no prior work experience, edged up as well, according to Friday's report.

The world's largest economy needs to create roughly 1,00,000 jobs per month to keep up with the increase in the working age population. According to economists who participated by news agency Reuters, nonfarm payrolls were estimated to increase by 1,70,000 jobs last month. Striking Hollywood actors and the bankruptcy of a major trucking company had led economists to anticipate slower job growth in August, according to the poll.

Though demand for labor is slowing, some services businesses like restaurants, bars and hotels remain desperate for workers. Job openings dropped to the lowest level in nearly 2-1/2 years in July, the US government reported this week. Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25 per cent-5.50 per cent range.