America’s employers added 187,000 jobs in August, evidence of a slowing but still-resilient labor market despite the high interest rates the Federal Reserve has imposed.Last month’s job growth marked an increase from July’s revised gain of 157,000 but still pointed to a moderating pace of hiring compared with the sizzling gains of last year and earlier this year.
From June through August, the economy added 449,000 jobs, the lowest three-month total in three years. In addition, the government revised down the gains for June and July by a combined 110,000.Friday’s report from the Labor Department also showed that the unemployment rate rose from 3.5% to 3.8%, the highest level since February 2022 though still low by historical standards.
But the rate rose for an encouraging reason: A sizable number of people — 736,000 — began looking for work last month, the most since January, and not all of them found jobs right away. Only people who are actively looking for a job are counted as unemployed.
The proportion of Americans who either have a job or are looking for one rose in August to 62.8%, the highest level since February 2020, before COVID-19 slammed into the U.S. economy.
The Fed’s streak of 11 interest rate hikes has helped slow inflation from a peak of 9.1% last year to 3.2% now. A decelerating job market could help shift the economy into a slower gear and reassure the Fed that inflation will continue to ease.
For that reason, many economists think the central bank may decide that no further rate hikes are necessary.
Friday’s jobs report also showed that wage gains are easing, a trend that may help provide reassurance that inflation pressures are cooling: Average hourly pay rose 0.2% from July to August, the smallest such gain in a year and a half. Measured year over year, wages last month were up 4.3% from August 2022, slightly below the 4.4% increase in both July and June.