USA adds 156000 jobs in August; unemployment 4.4%

Chelsea West
September 2, 2017

"With the survey evidence still strong and third-quarter economic growth on course for another decent gain after the second, there is no reason to believe that the modest drop-off in employment growth is the start of a more serious downturn", said Paul Ashworth, chief U.S. economist at Capital Economics.

With unemployment so low, MOOYAH Burgers, Fries and Shakes, based in Dallas, said it's paying more to attract entry-level talent and developing ways for workers to be promoted into higher positions with the company. It was the 83rd straight month of job gains. The same can not be said for August. Economists polled by Reuters had forecast payrolls increasing by 180,000 jobs last month.

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. (It's reported at 1.7 percent for the 12-month period from August 2016 through July 2017, the most recent number available). The storm means there will be zero economic output in the affected states of Texas and Louisiana, which could hurt the wider economy. Professional and business services led the job gains, with 40,000.

The slowing job gains, coupled with uncommonly low inflation, might make the Federal Reserve hesitant to raise its key short-term interest rate by December, when many Fed watchers had foreseen the next rate hike. But the Fed is still likely to start shrinking its balance sheet in September, says John Petrides of Point View Wealth Management.

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The data for demographic groups came from a survey of households that is part of the Labor Department's monthly jobs report.

Still, the average job growth for the past 3 months is 185,000 according to government data. Economists had expected the unemployment rate to remain unchanged. The participation rate has tumbled from 66% over the past decade, but some of that decline reflects an ageing USA population that is retiring and lowers the participation rate. Among the winners were construction, which added 28,000 jobs, health care, which added 20,200 jobs, and auto plants, which added 13,700 jobs.

Mack's story underscores the broader rebound in the manufacturing sector, which lost more than two million jobs in the last recession, but has partly clawed back its way back since then. Retailers hired just 800 workers.

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