OAN Staff James Meyers
3:27 PM – Friday, September 6, 2024
The latest job growth report showed that job additions in August increased but missed economist’s estimates, with the unemployment rate staying nearly the same.
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The U.S. Department of Labor on Friday reported that employers added 142,000 jobs in August, compared to the expected 160,000 that was projected by LSEG economists.
The unemployment rate barely dropped to 4.2%, in line with expectations, after it had unexpectedly risen to 4.3% in July, which was the highest rate since October 2021.
The number of jobs added in the previous two months were both revised downward. Jobs added in June went down by a total of 61,000 from a gain of 179,000 to 118,000, while July was revised down by 25,000 from 114,000 to 89,000.
Additionally, private sector payrolls missed LSEG economists’ expectations with 118,000 jobs added against a prediction of 139,000. Manufacturing payrolls declined by 24,000 in August, below estimates that expected the sector’s employment level to remain flat.
Furthermore, the construction area saw employment increase by 34,000 in August, almost double the average of 19,000 over the last 12 months. Health care employment increased by 31,000 jobs, which is below the yearly average of 60,000.
Multiple jobholders also increased by 65,000 to 8,538,000, and the number of part-time workers increased by 527,000, while full-time workers decreased by 438,000.
Policymakers at the Federal Reserve have been monitoring the labor market ahead of a highly anticipated interest rate cut later in September. Meanwhile, interest rates have been at the highest level in 23 years as the central bank has struggled to keep inflation down.
Currently, the federal funds rate sits at a range of 5.25% to 5.50%.
Meanwhile, markets have expected the Fed to announce a 25-basis point cut at their next policy meeting on September 17th and 18th, although new data showing struggles in the labor market could cause a 50-point basis cut.
“A softer-than-expected jobs report may support those in favor of a 0.5% rate cut on September 18, but the jury is likely still out,” Chris Larkin, managing director of trading and investing at E*Trade from Morgan Stanley, said, “in the meantime, markets are likely to be sensitive to any other data that suggests the economy is cooling off too much.”
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