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U.S. Nonfarm Payrolls Rose a Solid 315k in August but Wage Growth Slowed

Economic Indicators Sep 02, 2022 08:37AM ET
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© Reuters

By Geoffrey Smith

Investing.com -- The US economy continued to create jobs at a solid pace in August, but wages growth slowed and the unemployment rate ticked up surprisingly, adding to tentative signs of a slight cooling off of the labor market.

Nonfarm payrolls rose by 315,000 through the middle of the month, a slowdown from July's 526,000 but clearly ahead of consensus forecasts for a 300,000 gain. Wage growth also eased by more than expected, with average hourly earnings rising only 0.3% rather than the 0.4% expected. That was down from 0.5% in July. As such, the annual rate of earnings growth stayed at 5.2%, well below the current rate of inflation.

The Labor Department's monthly report also noted that the unemployment rate ticked up to 3.7% of the workforce from 3.5% in July, its highest level since February, but still close to historic lows.

"This growth brings total nonfarm employment 240,000 higher than its pre-pandemic level in February 2020," the Labor Department said, citing "notable" job gains in professional and business services, health care, and the retail sector.

Even so, the pandemic continues to leave deep marks on the economy. Even after a fall of 300,000 in August, some 1.9 million people across the country were still unemployed because their employer closed or lost business during the two-year reign of COVID-19. Another half a million were still kept out of the labor force altogether by its consequences.

Analysts said the slight decline in wage costs and an increase in the labor force participation rate would take a little of the pressure off the Federal Reserve, pointing to some modest relief on the inflation front. However, they added that the report was broadly consistent with other data showing the labor market is still relatively tight by historic standards. Data earlier this week showed a surprise increase in job vacancies in July and another drop in weekly jobless claims.

"All told, many US labor indicators remain very strong, and the ones that looked the most problematic a few months are ago, are bouncing," said Jens Nordvig, chief executive of Exante Data, via Twitter. "There is really nothing to make the Fed relax and pivot."

"The Federal Reserve should take much solace in the numbers in its battle against high inflation," said Mark Zandi, chief economist with Moody's Analytics. "The job market is bending under the weight of the Fed’s interest rate hikes, but it’s not breaking."

U.S. Nonfarm Payrolls Rose a Solid 315k in August but Wage Growth Slowed
 

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Comments (23)
Hunt Richardson
Hunt Richardson Sep 03, 2022 5:35AM ET
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those employment gains are in low paying jobs. lots of layoffs, store closings and reduced revenue/profit expectations all over America
Brad Albright
Brad Albright Sep 03, 2022 5:35AM ET
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You are arguing against empirical data that contradicts every point you assert. Another fact-free opinion from a know-nothing kook who hates America.
Todd Gray
Todd Gray Sep 03, 2022 12:19AM ET
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we're heading into the fall doldrums, recession is here and growing worldwide, markets are still ridiculously overvalued, and the Fed has to continue to tighten or they risk even more serious inflation than what's here. And, many layoffs almost always occur shortly after peak inflation. NOTHING NEW. And, when the ###l has the Fed ever made a landing soft? That's a myth.
Todd Gray
Todd Gray Sep 03, 2022 12:12AM ET
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Fact of the matter, is almost every single time inflation goes wild, job losses occur shortly after the peak. So says history.
David Beckham
David Beckham Sep 02, 2022 11:30AM ET
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Ok no rate hike now 20000 eow
TALLURI ANJANEYULU
TALLURI ANJANEYULU Sep 02, 2022 10:06AM ET
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VOLATILITY MAY PERSIST.
Tre Hsi
Tre Hsi Sep 02, 2022 10:06AM ET
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volatility is always in stock markets
First Last
First Last Sep 02, 2022 10:06AM ET
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Tre Hsi   i'd love to buy straddles for $0!
TALLURI ANJANEYULU
TALLURI ANJANEYULU Sep 02, 2022 10:04AM ET
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FALL OF STOCKS MAY STOP FOR A WHILE.
Tom Homes
Tom Homes Sep 02, 2022 10:02AM ET
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Gold and oil hate rising rates and strong $ sell gold
Black Bear
Black_Bear Sep 02, 2022 10:02AM ET
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Rising rates yes, but still believe it will be limited. We should remember how many debts the US has. Too high rates would cause new trouble.
Tom Homes
Tom Homes Sep 02, 2022 10:01AM ET
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bear food to eat the bulls
Rajendra Arora
RKARORA Sep 02, 2022 9:39AM ET
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I think market is also influenced by the levels. DOW will rise from here as risk and rewards are favourale for bullish trade in DOW . Better to do by options
Mohd Izhar Muslim
Mohd Izhar Muslim Sep 02, 2022 9:35AM ET
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Thank you for sharing the article 💯
 
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