Job growth rebounds in August

In August, the U.S. economy added 142,000 jobs, a notable increase from July’s revised growth of 89,000, the Labor Department reported on Friday, although it fell short of analysts’ expectations of 160,000. The unemployment rate decreased to 4.2% from 4.3%, yet remains higher than the 3.7% recorded at the year’s start. The report is likely to reinforce the Federal Reserve’s plan to lower interest rates by a quarter point. August’s job gains were led by hiring in construction and healthcare. The labor-force participation rate held steady. Average hourly pay rose 14 cents to $35.21, pushing up the year-on-year increase from 3.6% to 3.8%. Leisure and hospitality led the August job gains, with 46,000. Construction added 34,000 jobs; health care, 31,000; the public sector, especially local government, 24,000; and social assistance, 13,000. Professional and business services added just 8,000, and manufacturing lost 24,000 while retail shed 11,000. Paul Ashworth of Capital Economics said the report “was probably just enough” to keep the Fed on track to cut its benchmark rate by a quarter point but “the labor market is clearly experiencing a marked slowdown.” However Kathy Bostjancic, Nationwide’s chief economist, said the data probably isn’t enough to nudge the Fed into a half-point cut but added it “leaves open the possibility of faster (half-point) cuts in November and December.”