US hiring picked up in August and wage growth slowed, offering a mixed picture of both resilience and moderation in the labor market.
Nonfarm payrolls rose by 187,000 after the prior two months were revised significantly lower, a Bureau of Labor Statistics report showed Friday. The unemployment rate climbed to 3.8%, largely reflecting a pickup in participation, and wage growth slowed.
The payrolls figure also includes a combined drop of 54,000 in the film and trucking industries, largely reflecting an entertainment strike and the shutdown of a major carrier, the report showed.
| Metric |
Actual |
Median Estimate |
| Change in payrolls (MoM) |
+187k |
+170k |
| Unemployment rate |
3.8% |
3.5% |
| Average hourly earnings (MoM) |
+0.2% |
+0.3% |
The labor market has been the stalwart of the US economy this year, supporting renewed momentum that may help the nation avert recession — at least in the near term. While job openings and wage gains have both retreated in recent months, hiring and incomes are still firm enough to bolster consumer spending.
That said, Friday’s report offered fresh signs that hiring hasn’t been as strong as previously reported. June and July payroll gains were revised lower by 110,000, following data last week that estimated US job growth was probably less robust in the year through March.
This is the last jobs report the Federal Reserve will see before its next policy meeting later this month. While policymakers are still expected to hold interest rates steady, Chair Jerome Powell said at the central bank’s Jackson Hole symposium last week that officials are prepared to keep interest rates high and possibly hike again should inflation prove sticky.
Treasury yields slid, S&P 500 index futures extended gains and the dollar weakened after the report. Traders continue to see the Fed leaving interest rates unchanged this month, and they also lowered the probability of a hike in November.
Labor Supply
The report showed more people are coming back into the labor force, which may also help soften wage pressures. The overall participation rate — the share of the population that is working or looking for work — rose for the first time since March to 62.8%, the highest since February 2020. For those ages 25-54, known as the prime-age group, it approached a record.
With the supply and demand for labor coming more into balance, the outsize pay gains during the pandemic have faded. Average hourly earnings were up 0.2% from July — the smallest increase since early last year — and 4.3% from a year earlier.
The August advance in payrolls was broad-based, led by gains in health care, leisure and hospitality and construction. Manufacturing payrolls increased by the most since October and reflecting more hiring in machinery and fabricated metals.
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