The U.S. economy added fewer jobs than anticipated in August, but the unemployment rate did come off July’s surprise 4.3%. According to the latest data from the Bureau of Labor Statistics (BLS), the U.S. added 142,000 jobs in August when economists expected around 165,000. The month’s unemployment rate of 4.2% came in as expected.
In July, preliminary data showed 114,000 jobs added and 4.3% unemployment, triggering a recession indicator known as the Sahm Rule.
In Friday’s release, the BLS revised down July’s numbers to just 89,000 jobs added for the month. It also revised down June’s numbers by 61,000 jobs, from 179,000 to 118,000 jobs added. In total, jobs added in June and July are 86,000 lower than previously reported by the Labor Department.
This is in addition to a massive downward revision for the 12 months ending in March. According to Labor Department revisions, the U.S. economy added 818,000 fewer jobs than previously reported over that time. Therefore, while the labor market remained strong over those 12 months, it did not perform as well as the initial data indicated. The Labor Department will not finalize these estimates until February 2025.
“It is an indication that the Fed really has to step in at this point,” Business Insider Deputy Editor Bartie Scott told Straight Arrow News. “It’s under some pressure that maybe it has waited too long, and I think those numbers potentially back that up.”
“The interest rate hikes and keeping them steady for a year has really slowed down the labor market,” Scott continued. “And those numbers are showing us that maybe it started before we knew and it’s slower than we knew.”
The Federal Reserve is expected to cut its benchmark interest rate in its September meeting, the first such cut since March 2020. The Federal Open Market Committee has been holding the target range at a two-decade high of 5.25%-5.5% for more than a year in an attempt to bring down inflation.
At a speech in Jackson Hole, Wyoming, in August, Fed Chair Jerome Powell said it was time for policy to adjust after “unmistakable” cooling in the labor market. The Fed makes its next rate decision on Sept. 18.
