- Michael Feroli, chief U.S. economist at JPMorgan Chase & Co.
The U.S. labour market unexpectedly recorded the slowest employment growth in eight months, while the nation's jobless rate declined, meeting analysts' expectations. Non-farm payrolls rose 142,000 in August, missing market forecasts of 230,000, and after the gain of 212,000 a month earlier. Moreover, June and July data were revised downwards to show 28,000 fewer jobs created than previously reported. The surprise slowdown in job growth contrasts with other labour market indicators such as initial applications for unemployment claims, which are hovering near their pre-recession levels. In addition, manufacturing and service sector surveys showed strong employment growth in August and household perception of the labour market brightened significantly. The data lessens the likelihood of the Federal Reserve raising interest rates towards the end of the first quarter rather than in the middle of next year.
The jobless rate did tick down to 6.1% last month amid a drop in the percentage of people working or trying to find work. The participation rate, which indicates the share of working-age people in the labour force, decreased to 62.8%, matching the lowest since 1978, from 62.95 a month before. The underemployment rate, which includes part-time workers who would prefer a full-time position and people who want to work but have given up looking for, dropped to 12% from 12.2%.
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