U.S. Job Growth Misses Expectations, May Delay Fed Tapering

IBM Job Fair
AP
By Lucia Mutikani

WASHINGTON -- U.S. job growth was less than expected in August and the unemployment rate dropped to a 4½ year low as workers gave up the search for work, which could delay the Federal Reserve scaling back its massive monetary stimulus later this month.

Nonfarm payrolls increased 169,000 last month, the Labor Department said Friday, adding to signs that third-quarter economic growth may have slowed down a bit. The unemployment rate fell to 7.3 percent, the lowest since December 2008.

Economists polled by Reuters had expected job gains of 180,000 last month and for the unemployment rate to hold steady at 7.4 percent. Not only was hiring less than expected last month, the job count for June and July was revised to show 74,000 fewer positions added that previously reported.

In addition, the participation rate - the share of working-age Americans who either have a job or are looking for one - dropped to its lowest level since August 1978.

The closely watched jobs report will provide a crucial piece of evidence for the Fed as it debates the future of its $85 billion per month bond-buying program, and it will set the tone for global financial markets.


More: Jobs That Pay At Least $25 An Hour

Policymakers from the U.S. central bank meet on Sept. 17-18 and had been widely expected to turn down the dial on the purchases they have been making to keep interest rates low and boost growth.

Fed officials have made clear that they would base their decision on the progress the labor market has made since they launched their third round of 'quantitative easing' a year ago. When they pulled the trigger, they were looking at a jobless rate that stood at 8.1 percent.

The employment report suggested the economy was struggling to regain momentum after stumbling early in the third quarter.

Consumer spending, home building, new home sales, durable goods orders and industrial production all weakened in July.

The economy grew at a 2.5 percent annual pace in the April-June period. Many economists had expected an acceleration in momentum in the second half of the year.

The employment report is at odds with other data that have shown signs of improvement in labor market conditions. The number of Americans filing new applications for jobless benefits is near five-year lows. A gauge of service sector employment released on Thursday hit a six-month high in August.


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Other details of the employment report were mixed, with a bounce in average hourly earnings and the length of the average workweek, which slipped in July.

Average hourly earnings rose five cents.

The length of the workweek rose back to an average of 34.5 hours from a six-month low of 34.4 hours in July. The drop had been blamed on employers' shifting some positions to part-time in an attempt to curb costs they might face under the Affordable Care Act.

Last month, the private sector accounted for the bulk of the job gains, but government payrolls increased 17,000. Factory employment bounced back after falling in July.

Construction payrolls were flat in August. There was a another month of strong job gains in the retail sector, while leisure and hospitality employment also posted solid increases.



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coochiescooter

mily469withbarry

September 06 2013 at 9:39 PM Report abuse rate up rate down Reply
coochiescooter

chrissythesissy1101

September 06 2013 at 9:36 PM Report abuse rate up rate down Reply
coochiescooter

rickperryspoop2

September 06 2013 at 9:35 PM Report abuse rate up rate down Reply
coochiescooter

BigMacncheesejr

September 06 2013 at 9:34 PM Report abuse rate up rate down Reply
coochiescooter

Ropersomeydope

September 06 2013 at 9:33 PM Report abuse rate up rate down Reply
Mingo

Does anyone ever say where these jobs are were goverment jobs Reason I ask is every week we read some big company (with good jobs ) is reducing their work forces At the same time many more jobs move off shore The one way the job rate changes is a fraud When people can no longer collect unemployment they are no longer counted The people on welfare a re also not coounted so that makes the rate look much smaller than it is Mant cities in america have around or over 20% unemployment and getting worse Obamacare will most likely cause more government jobs and a large reduction in private sector jos

September 06 2013 at 12:24 PM Report abuse rate up rate down Reply
jwkitchensfl1

You want jobs? Ask your republican reps why they have not voted to help with jobs? Do nothing republicans have brought this recovery to a crawl and are laughing in the faces of us American people. What fools we all are for allowing this obstructionists bunch to continue.

September 06 2013 at 10:20 AM Report abuse rate up rate down Reply
1 reply to jwkitchensfl1's comment
Chaz

The reality is that the democrats are holding things up. You liberals are just too stupid too see that. You're guy sucks. January 2017 can't come soon enough for both of them to beout and no hiliary Clinton either

September 06 2013 at 3:59 PM Report abuse +1 rate up rate down Reply
pm0501

This favorable news doesn't do anything for the markets as they're diving under Obama's incompetent handling of the Syria situation.

September 06 2013 at 10:15 AM Report abuse +1 rate up rate down Reply
1 reply to pm0501's comment
roperbingobabe

Markets are "diving" under Obama? The Dow was at 7849 when the bush left. If McCain had won, the U.S. would be in Syria and at war with Iran and the U.S. would still be in Iraq.

September 06 2013 at 5:55 PM Report abuse -1 rate up rate down Reply
amicusceo

To hold at 7.4 it was expected that 180,000 jobs needed to be added with all else being equal (only 169,000 were added). Well the revised numbers for June and July went down, so that was 74,000 less. The unemployment should have gone up. Instead it number went down to 7.3. That means that a whole lot of people left the work force altogether. Labor participation rate is a much better indicator to go by. Only 63.5% of those eligible to work are working, The unemployment rate is closer to 35% than 7.3

September 06 2013 at 10:03 AM Report abuse rate up rate down Reply
lahills99

How is that hopey changey crap working out for you?

September 06 2013 at 9:56 AM Report abuse rate up rate down Reply
2 replies to lahills99's comment
pm0501

For those who depend on Uncle Sam's handouts, pretty good!

September 06 2013 at 10:16 AM Report abuse rate up rate down Reply
1 reply to pm0501's comment
roperbingobabe

Republican House member Stephan Fincher of Tennessee recently said he could not vote yes on the farm bill because it did not contain enough cuts to food stamps. Stephan forgot to mention that he receives $1250.00 a week in federal farm subsidy welfare even though he makes $174,000.00 a year as a member of Congress. It appears to be a republican agenda to cut programs for the poor......but still they find a way to hand out an extra $5000.00 a month to the well off like Stephan....or billions in subsidies for super rich companies like big oil. I wonder.....what would Jesus think about the republican's agenda?

September 06 2013 at 6:06 PM Report abuse -1 rate up rate down
roperbingobabe

Well, big oil still gets billions in government subsidies while republicans want to cut food stamps for the poor. Jesus loved the rich and the poor.....but advocated for the rich to help the poor and commanded his followers to help the poor.. I guess republicans missed this as they advocate for the rich while cutting programs for the poor.

September 06 2013 at 6:14 PM Report abuse -1 rate up rate down Reply

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