One of the most closely watched employment report in years came in this morning showing hiring in August was lower than expected. The U.S. Labor Department said employers added 173,000 new jobs last month, almost 50,000 fewer than economists were expecting.
The Federal Reserve is set to meet in two weeks with an interest rate hike top on its agenda. Economists and the Fed’s board were looking to the August jobs report for guidance about the labor markets. A weak report might have encouraged the Fed to delay hiking rates.
Because the U.S. Bureau of Labor Statistics gathered the jobs data before the sharp drops in the stock market last month, the impact, if any, is not reflected in this morning’s report.
Though new job creation was the lowest since March, other parts of the report pointed to a strengthening economy. The unemployment rate fell to 5.1 percent from July’s 5.3 percent, the lowest level since April 2008. Hourly nonfarm earnings rose by 8 cents, a rate of .3 percent which was more than expected.
In addition, the initial jobs counts for June and July were revised up by a total of 44,000.
August’s report is among the more volatile of the year, due to seasonal factors. The New York Times noted that the Labor Department’s initial August numbers are revised upward by an average of 79,000.
The biggest gains in August came from hiring in education and healthcare. Government education hiring surged as 22,900 new jobs were added to national payrolls. Healthcare increased by 40,500, with hiring by ambulatory services such as doctors’ offices and home health care, adding 21,100. Hospitals added 15,900.
Thee wee also significant gains in jobs at bars and restaurants (+26,100), financial services (+19,000), and in professional and technical services (+14,500), a sector that includes computer services and management and technical consulting. Temp grew by 10,700.
Manufacturing lost 17,000, most of that coming in the non-durable goods area where food manufacturing was off by 6,500 jobs.
Unlike in previous months when the unemployment rate declined because people gave up looking for work and dropped out of the labor force, in August more unemployed found jobs. The labor force participation rate was unchanged at 62.6 percent.