The FINANCIAL — U.S. employment growth slowed in August, but the unemployment rate fell more than expected due to a smaller labor force, according to Nasdaq.
Nonfarm payrolls rose a seasonally adjusted 173,000 in August, the Labor Department said on September 4. Revisions showed employers added 14,000 more jobs in June and 30,000 more jobs in July than previously estimated.
The unemployment rate, which comes from a separate survey of U.S. households fell to 5.1% in August, from 5.3% the previous month.
Economists surveyed by the Wall Street Journal had projected a 220,000 increase in payrolls and a drop in the unemployment rate to 5.2%.
Average hourly earnings of private-sector workers rose 8 cents last month to $25.09. From a year earlier, wages were up 2.2%, roughly in line with the wage gains seen for much of the expansion.
Meanwhile, the share of Americans either working or looking for work stayed steady at 62.6% in August. The participation rate hasn’t changed for the past three months and is now roughly where it was 1977.
Friday’s report presents a mixed picture for Federal Reserve officials, who have said they will take Friday’s employment report into account as they weigh whether to raise interest rates for the first time since 2006 during their Sept. 16-17 meeting.
The August report is the last major indication they will get about the health of the labor market before the meeting.
Although the number of new jobs fell below the 218,000 monthly average recorded between January and July, the unemployment rate fell more than anticipated, suggesting a further decrease in labor-market slack. The total number of unemployed workers fell by 237,000 and the labor force dropped by 41,000, suggesting that more unemployed found jobs in August.
Economists once thought the Fed was poised to act but the recent turmoil in global financial markets has muddied the outlook.
The Labor Department uses the week that includes the 12th day of the month as the reference week for its employment surveys. As a result, the August survey took place before the recent bout of stock-market volatility.
Friday’s employment reading could look better once revised estimates come in. Early readings of August job numbers in recent years have subsequently been revised upward.
Job growth in August was concentrated in health-care and social assistance and in financial activities.
Manufacturing employment fell by 17,000 in August.
At 5.1%, the unemployment rate for August indicates there are 8 million people who wanted a job could not find one, down from 8.3 million in July. An additional 6.5 million were working part-time even though they wanted full-time work.
A broader measure of unemployment that includes people looking for work, stuck in part-time jobs or who have been discouraged about finding a job fell to 10.3% from 10.4% in July.
The average workweek rose by 0.1 hours to 34.6 in August.