US unemployment ticks up in August to 3.8%
Average hourly wages rose 0.2% from July and 4.3% on an annual basis, decreasing slightly but remaining above the levels needed to hit the Fed’s 2% inflation target.
The Bureau of Labor Statistics reported today (1 September) that total nonfarm payroll employment increased by 187,000 throughout the month, also above analyst predictions of 170,000.
Despite overshooting expectations, the number of new jobs added represented the third consecutive month of gains below 200,000, as the Federal Reserve continues in its quest to cool the labour market to tame inflation.
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Figures for July and June were also revised lower by a combined 110,000 by the BLS. Average hourly wages rose 0.2% from July and 4.3% on an annual basis, decreasing slightly but remaining above the levels needed to hit the Fed's 2% inflation target.
Richard Flynn, managing director at Charles Schwab UK, said: «Investors will interpret today's jobs report as a sign that demand remains high in the labour market.
»Although strong wage growth is typically desirable, central bankers consistently point to the problems that a tight labour market can cause.
«While Jerome Powell recently reassured the market that progress is being made against inflation, he did so with the caveat that if the labour market remains strong, more work still might be needed.
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Flynn noted today's report may signal to the Fed that inflation could remain elevated, „prompting them to continue rate hikes in months to come“.
However, the market's probability of a rate hike from the Fed later this month inched down as a result of the data, falling from a 13% probability to 7%,
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