Job growth in the US was weaker than expected last month, raising concern that the world’s largest economy is starting to stumble under the weight of higher interest rates.
Employers added 142,000 jobs in August, less than the roughly 160,000 analysts had forecast, the Labor Department said. It also said job gains in the previous two months were lower than initially estimated.
However, the unemployment rate fell back, dropping to 4.2% from 4.3% in July.
The report is one of the most important gauges of the US economy and comes at a critical time, as voters weigh presidential candidates for the November election and the US central bank debates its first cut to interest rates in four years.
Analysts said the latest figures kept the Federal Reserve on track for a rate cut at its meeting this month, but would do little to resolve questions about the direction of the US economy or how big a cut it should make.
“Rarely has there been such a make or break number – unfortunately, today’s jobs report doesn’t entirely resolve the recession debate,” said Seema Shah, chief global strategist at Principal Asset Management.
The job gains in August, although below estimates, were higher than July, when a slowdown sparked fears and prompted several days of stock market turmoil.
Construction and health care firms led the hiring last month, while manufacturers and retailers got rid of roles.
Ms Shah said the data in the report was mixed, but contained enough worrying signs that the Fed should make a bigger cut.
“On balance, with inflation pressures subdued, there is no reason for the Fed not to err on the side of caution and frontload rate cuts,” she said.
Source Agencies
