Published: Sat, September 02, 2017
Markets | By Erika Turner

USA adds 156000 jobs in August, but unemployment rises to 4.4%

USA adds 156000 jobs in August, but unemployment rises to 4.4%

The economy created 156,000 new jobs in August, a lighter than expected increase but still plenty enough to keep the USA growing at a steady clip and give out-of-work Americans more hope. Though most of the major indices are little changed or unchanged, monthly figures for August come in at 156,000 down by 17 percent from the previous month's revised 189,000 number (reported in early August at 209,000). Manufacturing employment rose a brisk 36,000 jobs, much of that coming in auto manufacturing, a sector in which payrolls can be volatile in the summer as companies retool their plants. Given the choppiness of the data from month to month, a soft August should not be of great concern, though, and there were encouraging signs such as the job gains in cyclical industries such as manufacturing and construction.

All in all, the report suggests the job market remains healthy even though the economy has grown at a sluggish 2.1 percent annual rate during the first six months of 2017.

"Over the past 12 months, average hourly earnings have increased by 65 cents, or 2.5 percent", the report added.

The unemployment rate rose to 4.4% from 4.3% in July. This so-called labour force participation rate held at 62.9%.

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Mining continued to add jobs in August (+7,000), with all of the growth in support activities for mining. Professional and business services saw the biggest gains in August, with payrolls in this sector rising by 40,000. But economists expect initial unemployment claims to jump over the next few weeks as many businesses and workers have been immobilized by the devastating storms in Houston and across the Gulf Coast.

"The job market is in very good shape, but wage growth is very disappointing and that's likely to continue for over the next several months", Ryan Sweet, senior economist at Moody's Analytics, told Reuters. Retailers hired just 800 workers. The yield on the benchmark 10-year Treasury fell to 2.10%, the lowest level all year, before rebounding to 2.13%, essentially unchanged, according to Tradeweb.

The US economy grew at an annualised pace of 3 per cent in the second quarter, its fastest pace since the beginning of 2015. The average workweek dipped 0.1 hour to 34.4 hours.

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