Quick Facts:
- The unemployment rate, at 4.2 percent, and the number of unemployed people, at 7.1 million, changed little in August.
- Employment continued to trend up in health care, and in construction.
- The change in total nonfarm payroll employment for June was revised down by 61,000, from +179,000 to +118,000, and the change for July was revised down by 25,000, from +114,000 to +89,000. With these revisions, employment in June and July combined is 86,000 lower than previously reported.
- The number of long-term unemployed (those jobless for 27 weeks or more) was virtually unchanged at 1.5 million in August. The long-term unemployed accounted for 21.3 percent of all unemployed people.
Looking Forward:
- U.S. Jobs Report Shows Hiring Has Shifted Into Lower Gear Ahead of a key Federal Reserve meeting to set interest rates, employers added 142,000 jobs in August, fewer than economists had expected, and previous months were revised downward.
- Collectively, Friday’s figures depict a job market slowing under the pressure of high interest rates but still growing. Many businesses appear to be holding off on adding jobs, in part because of uncertainty about the outcome of the presidential election and about how fast the Fed will reduce its benchmark rate in the coming months.
- The Federal Reserve has been closely monitoring the labor market ahead of a widely anticipated rate cut later this month. Interest rates have been at the highest level in 23 years amid the central bank’s bid to tamp down inflation, with the benchmark federal funds rate sitting at a range of 5.25% to 5.50%. Markets have expected the Fed to announce a 25- basis point cut at their next policy meeting on Sept. 17 and 18, although the new data showing continued softness in the labor market could boost the case for a 50-basis point cut.
- Paul Ashworth, chief North America economist at Capital Economics, said the report showed “the labor market is clearly experiencing a marked slowdown” but “overall, still consistent with an economy experiencing a soft landing rather than plummeting into recession”.
Source: U.S. Bureau of Labor Statistics – The Employment Situation – August 2024
