August Jobs Report Surprisingly Limp

The Bureau of Labor Statistics reported Friday that employers added only 142,000 jobs throughout the month of August, down from the 202,000 created in the August of 2023. The unemployment rate fell from 4.25 to 4.22 percent. 

The jobs numbers for June and July were revised further down by a combined 86,000 jobs created, bringing the three-month average of jobs created to 116,000. 

Average hourly earnings grew 0.4 percent, though the labor force participation rate for those aged 25 to 84 fell slightly to 83.9 percent. Slack, the number of people working part time, who would rather be working full time, rose to 7.9 percent, the highest it has been since October 2021.

The Federal Reserve is set to meet again September 17–18, when it is possible that the Fed will lower interest rates to try to stimulate economic growth. The sluggish jobs numbers may convince them that a large rate cut is necessary. 

Some economists, however, feel that a large cut may reek of panic, and subsequently spook markets. 

“The 50 [basis point] cut might send a wrong message to markets and the economy. It might send a message of urgency and, you know, that could be a self-fulfilling prophecy,” the economist George Lagarias commented to CNBC. “So, it would be very dangerous if they went there without a specific reason. Unless you have an event, something that troubles markets, there is no reason for panic,” Lagarias continued.

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