Hiring cooled in August but remained consistent with steady U.S. job growth capable of holding down unemployment and producing decent wage gains.
Nonfarm payrolls rose by a seasonally adjusted 151,000 last month, the Labor Department said Friday. Revisions showed U.S. employers added 1,000 fewer jobs in June and July than previously estimated.
The unemployment rate, calculated from a separate survey of American households, was 4.9% in August, unchanged from July.
Economists surveyed by The Wall Street Journal had expected employers would add 180,000 jobs in August and forecast an unemployment rate of 4.8%.
Average hourly earnings for private-sector workers rose by 3 cents, or 0.1%, in August from July to $25.73. From a year earlier, average hourly earnings were up 2.4%. That is a slight slowdown from the prior month’s annual gain, but still well outpaces mild inflation.The latest data is the last broad measure of the labor market Federal Reserve officials will see before meeting on Sept. 20-21. The figures could spark a vigorous discussion between policy makers who see the economy as healthy enough to absorb a rate increase and those concerned about low inflation, middling economic growth and uncertainty from the presidential election and global turmoil.
U.S. employers have added jobs at a 182,000 monthly pace so far this year. That is down from average gains in 2015 and 2014—the best two years for employment growth since 1999—but is more than adequate in the view of many economists to absorb new entrants to the job market and keep the unemployment rate in check.
Some policy makers and economists expect hiring to moderate as the labor market tightens. Economists surveyed by the Journal earlier this year on average estimated the U.S. only needed to add 145,000 jobs each month to keep up with growth in the workforce.
“As the labor market is close to full employment, a slowdown may very well be needed to avoid overheating and cause the Fed to tighten policy faster than expected,” Wells Fargo economist John Silvia wrote in a research note earlier this week.
The August jobless rate is just above a postrecession low touched in May and in the range most Fed policy makers view as the longer-term average.
A tighter job market should support further wage growth and give Americans the ability to spend more. So far this year consumer spending has increased steadily and homes are selling at the best rate of the expansion.
But there are worrisome signs outside the job market. U.S. economic growth has held near 1% for three straight quarters, anemic gains even by the standards of the lackluster expansion. Business investment has decreased this year, corporate profits are soft and threats from economic weakness abroad still loom.
Job gains in August were led by the service sector and government. The health-care and social-services sector added 36,100 jobs. Leisure and hospitality added 29,000 jobs. All levels of government added 25,000 employees. The manufacturing sector shed 14,000 jobs. Employment in both the mining sector, which includes the oil and gas industry, and in the construction sector, shrank last month.
The labor-force participation rate held steady at 62.8% in August. The figure has been hovering near the lowest levels in almost 40 years, partly because the Baby-Boom generation is retiring, but also because some younger workers have given up on finding a job.
Another measure of unemployment and underemployment, including Americans who are working part time because they can’t find full-time jobs, also held steady at 9.7% in August.
The average workweek last month decreased by 0.1 hour to 34.3 hours.
The health of the labor market is sure to be at issue in the U.S. presidential election.
Democratic nominee Hillary Clinton’s campaign in part is based on President Barack Obama’s record, which includes consistent job creation since late 2010, after the economy emerged from a deep recession. Mrs. Clinton said last month she would boost jobs though investment in infrastructure and green technology.
Republican Donald Trump points out the current expansion features the weakest average annual growth of any since World War II. He says his trade and tax policies will lead to more high-paying jobs for Americans.