US August job growth stalls, unemployment rises

World
Europe

US job growth missed forecasts as the unemployment rate climbed, according to the key data report released Friday.

The world's largest economy added 156,000 net new positions for the month, the Labor Department reported which was far fewer than expected.

The jobless rate rose a tenth of a point to 4.4 percent, returning to the level seen in June.

Corporate recruiters (R) talk with job seekers in Washington, June 11, 2013. /Reuters Photo

Hurricane Harvey did not have any impact on the August jobs numbers, the Labor Department said, because the data was collected before the storm made landfall in Texas August 26.

Analysts had warned that the August jobs numbers can sometimes be soft, at least in the initial report, but even so, the figure fell well below a consensus forecast of 183,000.

The news was sure to be unwelcome in the White House, as President Donald Trump has taken credit for reinvigorating the American economy and for the solid job creation since he took office. He has pledged to add 25 million jobs over the next decade – a goal economists say is unrealistic.

With payroll gains for the prior three months revised downward by a cumulative 48,000, average monthly job creation for 2017 now stands at 176,000, compared to 187,000 in 2016.

Private employment rose by 165,000, below the 173,000 forecast, and far below the 237,000 reported this week by payroll services firm ADP.

The biggest gains were seen in services, a dominant part of the economy, but manufacturing employment rose by 36,000, putting the sector up 155,000 since reaching a low point in November.

And the construction industry added 28,000 workers in August.

But a 9,000-job contraction in the government workforce weighed on the total.

Wall Street stocks finished modestly higher on Friday after data showed slowed job growth in August, which could make the Federal Reserve cautious about raising interest rates again this year.

Traders in currency and bond markets, however, viewed the data as not soft enough to completely rule out another rate hike by the US central bank this year. The dollar climbed and Treasury yields rose.

Source(s): AFP ,Reuters