US job growth picks up in August, unemployment rate climbs

NEW YORK (Reuters) – The U.S. economy added more jobs than expected in August, but a rise in the unemployment rate and moderation in wage growth pointed to an easing in labor market conditions, fueling expectations the Federal Reserve could pause its rate hike cycle.

Nonfarm payrolls increased by 187,000 jobs last month, the Labor Department said in its closely watched employment report on Friday, above the 170,000 estimate of economists polled by Reuters. Data for July was revised lower to show 157,000 jobs added instead of the previously reported 187,000.

The unemployment rate rose to 3.8% from the 3.5% in July.

MARKET REACTION:

STOCKS: advanced and were last up 0.6%

BONDS: The yield on was down 5 basis points to 4.079%

FOREX: The was last down 0.3%

COMMENTS:BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN“The headline beat, but the details disappointed. June’s and July’s numbers were revised down materially. June and July were probably close to cruising speed for the labor market. Wage growth has slowed to a pace consistent with stable inflation. Payrolls have slowed to a pace consistent with stable inflation. The Fed stuck the landing, but they didn’t know it, so they’ll crash the landing instead.”

ART HOGAN, CHIEF MARKET STRATEGIST, B RILEY WEALTH, BOSTON​ 

“The overall report is very much in line with expectations. When we look at this number, it still leaves anticipation of the Fed leaving rates unchanged at the September meeting. The only anomaly I would see in the report is that the unemployment rate moved up and I suspect that a good chunk of that likely reflects the Screen Actors Guild and writers strike.

“Because of the different potential strikes, whether it’s the United Auto workers of the Screen Actors Guild with the writers, we’re going to have to consider this month and likely next month’s payroll numbers to be a little noisy until those strikes get worked out.”

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