Latest Jobs Report: Unemployment Still At Historic Lows; Job Growth Under Expectations

WASHINGTON, D.C. — The U.S. economy added 151,000 jobs in August, less than many economists projected, and the unemployment rate did not move, staying at a historically low 4.9 percent for the third month.

The monthly report on new jobs released Friday was weaker than expected, showing August hiring was decelerating but not enough to raise a red flag signaling some fundamental turn for the worse.

Forecasters has hoped for an even lower unemployment rate than 4.9 percent. The key total of new additions to payrolls rose 151,000, also not as much as expected. The prior two months were revised down a total of 1,000.

Health care hiring was a little off, and several categories of jobs, such as manufacturing, showed little or no change. Even though the report lacked spark, the monthly average for payroll growth is still a solid 232,000 for the three months through August, keeping alive the possibility the Federal Reserve might edge interest rates up a small amount as soon as later in the month. That would be the first escalation since December and only the second since the economic downturn of 2008, sending the message the central bank is confident there won't be an economic reversal any time soon.

The analysts at Econoday pointed out, "Earnings are very soft in this report, up only 0.1 percent in the month," so that wages over a year rose 2.4 percent, a slowdown from July. House prices are rising much faster. Another slight negative was that employers cut back on hours somewhat in August.

The big picture? The U.S. economy seems to be running neither too hot nor too cold, and while earnings aren't surging, they're not collapsing either. No matter what the Fed does, mortgage rates will be staying low for a while longer, though savings rates are going to stay very weak. The weekly numbers for jobless benefits, out Thursday, showed a low level of layoffs, so job security continues to be solid, at least for the time being.

By Denny Gulino, MNI

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