US labor market cools slightly, adding 315,000 jobs
(CN) — The U.S. economy gained 315,000 jobs in August while the unemployment rate unexpectedly rose to 3.7%, according to a Labor Department report released Friday.
Job market growth last month was not as strong as July – when the economy added a revised 526,000 positions – but it still puts the Federal Reserve in a difficult position as the central bank scrambles to tame inflation.
August hiring was in line with economists’ predictions of about 318,000 new jobs. The unemployment rate, though, surprisingly grew from a half-century low of 3.5% in July to 3.7%, as more people sought work.
"More labor force participation gave rise to an increased unemployment rate, which may help the Federal Reserve achieve its soft landing,” wrote AnnElizabeth Konkel, an economist at Indeed Hiring Lab. “While there are clouds on the horizon in the form of tightening monetary policy and geopolitical instability, the sun is still shining on the U.S. labor market.”
While the labor market cooled off slightly last month, Konkel noted the U.S. economy is averaging 378,000 new jobs a month over the past three months.
“With increased labor force participation and robust employer demand for workers, today’s report underscores the labor market is not in a recession,” she wrote.
Wages are up 0.3% from July and 5.2% over the last year, with average hourly earnings currently standing at $32.36.
Payroll gains were driven by the professional and business services industry, which added 68,000 jobs in August, as well as health care and retail, which added 48,000 and 44,000 positions, respectively.
The leisure and hospitality industry, which has led the way in hiring for much of the economic recovery after being hit hardest by pandemic lockdown orders, added only 31,000 jobs in August, after averaging 90,000 for the first seven months of the year.
Employment in manufacturing rose by 22,000 and there were 17,000 more jobs in financial activities. Notable gains were also seen in wholesale trade (15,000) and mining (6,000).
In the public sector, there were 2,000 fewer jobs at the federal government level but 3,000 and 6,000 more in state and local government, respectively.
While the number of jobs added in July was revised down by just 2,000 to 526,000, the June total was slashed by 105,000, from 398,000 to 293,000.