US Added 156000 Jobs in August; Jobless Rate at 4.4%

Jon Howard
September 2, 2017

The unemployment rate ticked up from 4.3% in July to 4.4% and the USA economy added 156,000 jobs in the month, well below expectations for around 180,000 new jobs.

In a scheduled data release on Friday (1 September), the Labor Department said the country's headline unemployment rate ticked up to 4.4%.

The 156k increase in jobs in August was smaller-than-expected - and more-so when including 41k worth of downward revisions to the two prior monthly estimates.

The BLS noted in its report that Hurricane Harvey had "no [discernible] effect" on the employment data for August. The August job report is unlikely to deter the Federal Reserve from announcing the start of unwinding its balance sheet this month, analysts said. The figure for July was revised down to 189,000 from 209,000, while the June number was reduced to 210,000 from 231,000.

Lewis Alexander, chief USA economist at Nomura, said low productivity growth and other structural factors will hold down overall economic growth in a Friday research note.

August was expected to be a weak month for job creation, but it was worse than that.

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The August jobs report showed that roughly the same proportion of people last month as in July either had a job or were looking for one. After declining earlier in the year, the unemployment rate has been either 4.3% or 4.4% percent since April.

August was a big month for manufacturing, construction, professional and technical services, health care and mining.

Pay usually rise 3% to 4% a year at this stage of an economic recovery, but a slew of factors including global competition and the retirement of higher-paid baby boomers may be holding wages back. Temporary help services employment was almost flat in August, adding 100 jobs.

But Ian Shepherdson, chief economist at Pantheon Macroeconomics, says the August wage increase was likely artificially low because the survey was completed before the 15th of the month when many workers get a paycheck. Since November 2016, 155,000 jobs have been added in the manufacturing sector, as manufacturers continue to express confidence in the president on issues ranging from taxes to trade.

Average hourly earnings increased by 3 cents to $26.39, after a 9-cent increase in July.

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