142,000 Jobs Added in August, Unemployment Rate Stagnant

The U.S. Bureau of Labor Statistics released jobs data from August, finding that total nonfarm payroll enrollment increased by 142,000. The unemployment rate changed little at 4.2%.

Gains occurred in construction and health care.

The change in total nonfarm payroll employment was revised down by 61,000 for June, from 179,000 to 118,000.

Additionally, the change for July was also revised down by 25,000, from 114,000 to 89,000.

Across both months, the job numbers for June and July were 86,000 below what was previously reported.

Industry economists reacted to the news, especially in light of a Fed meeting later this month.

“The August employment report confirmed that the job market is cooling. With a 142,000 increase in August and downward revisions of the June and July numbers, job growth has slowed to an average 116,000 over the past three months,” said MBA SVP and Chief Economist Mike Fratantoni. “That is likely not enough to keep the unemployment rate from rising further. It was little changed at 4.2% in August, but we do expect it will increase over the next year, perhaps getting as high as 5%.”.

“The nation’s economy remains resilient, with pockets of growth continuing in some areas while weakness remains in areas sensitive to high rates, such as homes and autos,” said Selma Hepp, CoreLogic Chief Economist. “The real question remains whether or not the Federal Reserve waited too long to begin to reduce rates in the effort to avoid recession and if a soft landing is indeed achievable.”

“The August labor data shows improvement over July, but ongoing softening, which likely sets up the Fed to kick off its rate-cutting cycle with a 25-basis point cut later this month,” said First American Senior Economist Sam Williamson  “Had the labor market deteriorated more significantly, it may have triggered the Fed to consider a 50-basis point cut in September.”

“Federal Reserve officials have recently pivoted from a primary focus on inflation to a more balanced view, with concerns both about inflation and employment,” Fratantoni said. “This report highlights that such a pivot makes sense, and that a 25-basis-point cut at its September meeting is a sensible first step at this time.”