The nation’s unemployment rate ticked down to 6.1 percent in August as hiring slowed at a variety of businesses, which added only 142,000 new jobs during the month, the Labor Department reported Friday morning.
The new job gains were the slowest this year and far fewer than the average 212,000 created each month in the past year. They also were far below predictions on Wall Street that August would bring more than 200,000 new jobs.
In another sign the job market softened some during the summer, the department revised down its estimates of jobs created in June and July by 28,000. Those two months still enjoyed a faster pace of job growth well over 200,000.
“The number was a surprise and a disappointment but we do not believe that it indicates a slowdown in the U.S. economy,” said Joseph Lake, U.S. analyst at the Economist Intelligence Unit.
“All other recent macroeconomic data has been consistent with the emerging picture of a strengthening U.S. economy,” he said. “Six months of job creation in excess of 200,000 positions before today’s numbers reflects growing confidence among businesses that the U.S. recovery is becoming entrenched, and that post-crisis consumer deleveraging is well advanced.”
Chris Williamson, chief economist at Markit, said the job slowdown might indicate businesses are reacting to the bad news generated by slower growth abroad and numerous conflicts overseas in the Middle East and Ukraine, even though matters at home remain peaceful and the economy remains healthy.
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“Although the summer saw robust economic growth, job creation has slowed alongside as worries about the global economic outlook have intensified,” he said. It gives good reason to be cautious about the outlook for growth for the rest of the year, he said.
By most measures, the job market was little changed during the month. Despite a decline in the unemployment rate to 6.1 percent from 6.2 percent, the share of adults working slid back a tick to 62.9 percent.
With the steady growth of jobs in the last five years, the number of people forced to work part time for economic reasons fell by 234,000 to 7.3 million, and the number of people out of work for six months or longer dropped 192,000 to 3 million.
The average work week stayed close to its cyclical high at 34.5 hours, and average hourly earnings rose 6 cents to $24.53.
That brought average yearly wage gains to 2.1 percent — still subpar for a recovery that is five years old.
The unusually sluggish pace of wage growth is increasingly the focus of both workers and top policymakers in Washington.
“At this point, I suspect the real puzzle remains why wage growth is so weak, not why it may be very, very mildly rising,” said Justin Wolfers, economics professor at the University of Michigan.
Stock futures indexes and bond yields all dropped on the news of slower employment. Some on Wall Street had been concerned that the pick-up in job growth earlier this year might start to stoke wage inflation.
“It’s way, way too early to worry about excess wage growth,” said Mr. Wolfers, noting that at this stage in previous expansions, wages more typically expanded at the rate of productivity plus 2 percent, or by between 3 percent and 4 percent a year.
• Patrice Hill can be reached at phill@washingtontimes.com.
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