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US economy adds more jobs in August, but not as many as expected

Monday, September 5th 2016 - 08:58 UTC
Full article 2 comments
The number of extra jobs was sharply down from an upwardly revised July figure of 275,000. It was also smaller than the average monthly increase of 204,000 The number of extra jobs was sharply down from an upwardly revised July figure of 275,000. It was also smaller than the average monthly increase of 204,000
Despite the apparent slowdown in August, the continued expansion of employment in the US, the unemployment rate remained at 4.9% Despite the apparent slowdown in August, the continued expansion of employment in the US, the unemployment rate remained at 4.9%
Janet Yellen, said economic growth and a stronger jobs market meant “the case for an increase in the federal funds rate has strengthened in recent months”. Janet Yellen, said economic growth and a stronger jobs market meant “the case for an increase in the federal funds rate has strengthened in recent months”.

The expanding US economy added another 151,000 jobs in August, according to the US Labor Department, while the unemployment rate stayed at 4.9%. The number of extra jobs was sharply down from an upwardly revised July figure of 275,000. It was also a smaller rise than the average monthly increase of 204,000 seen during the previous 12 months.

 Economists now think the chances of the US central bank raising interest rates this month have been reduced. The official data for the country's “non-farm payrolls” shows that the number of people out of work was unchanged at 7.8 million in August.

The US economy has been expanding steadily since the end of the last recession in 2009.

Many US economists had expected a larger rise in the number of new jobs being created, more in line with the 190,000 jobs per month added during the previous three months.

But despite the apparent slowdown in August, the continued expansion of employment in the US still points to the possibility that the central bank, the Federal Reserve, could raise interest rates later in the year, most probably in December.

Last week Janet Yellen, the chairwoman of the Federal Reserve, said the country's economic growth and a stronger jobs market meant “the case for an increase in the federal funds rate has strengthened in recent months”.

Chris Williamson, chief economist at the financial data service Markit, said: “The data-dependent Fed will most likely see the payroll numbers as taking pressure off any immediate need to hike interest rates, significantly reducing the scope for further policy action in September.”

“However, with survey data suggesting some of the recent slowdown in hiring and business activity is due to uncertainty ahead of the presidential election, a rate rise later in the year, most likely December, remains on the table providing the economic data flow picks up again in the fourth quarter.”

 

Categories: Economy, Politics, United States.

Top Comments

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  • ChrisR

    “The data-dependent Fed will most likely see the payroll numbers as taking pressure off any immediate need to hike interest rates, significantly reducing the scope for further policy action in September.”

    And there you have it, the lame duck president and the coming disaster of a presidential election will more than 'confuse' Yellen.

    Have Congress agreed a budget going forward yet?

    Sep 05th, 2016 - 05:35 pm 0
  • Hepatia

    The issue that drives the support for both Sanders and Trump is not the number of jobs added. Its what type of jobs are added.

    Sep 06th, 2016 - 01:28 am 0
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