The U.S. economy added 162,000 jobs in August and the unemployment rate held steady at 4.1 percent.
Economists had expected the economy would add 55,000 jobs and the unemployment rate would tick up to 4.2 percent from 4.1 percent in July.
The previous month’s reported job loss was revised away. The July estimate was revised up by 44,000, from a loss of 23,000 to a gain of 21,000. The June gain was revised up by 11,000 to 31,000. After these revisions, employment in June and July combined is 55,000 higher than previously
reported.
The U.S. labor market has experienced a significant shift away from dependence on an immigration-driven workforce. Jobs numbers that may seem anemic compared with recent years may actually indicate healthy—even robust—growth under current conditions, according to economists.
Many economists now estimate the so-called “break-even” rate of job growth—the rate required to keep unemployment from rising—may be as low as zero. Others estimate that it may be from 10,000 to 55,000 jobs. As a result, some months are likely to see negative payroll changes even without increasing the level of joblessness in the U.S. By contrast, when immigration was running at higher levels from 2021 through 2024, the economy needed to add more than 100,000 jobs monthly to keep pace with labor-force growth.
Retirements are also driving down the growth of the labor force, as an increasing number of members of the large Baby Boom generation leave work and smaller generations fail to fully replace them.
This month’s report comes at a hinge moment for the Federal Reserve and markets. Investors are uncertain whether the Fed will lift interest rates when it meets later this month or keep them on hold. Weak jobs growth could convince the Fed to hold off on hikes, while strong growth would likely add to pressure on the Fed to raise rates to bring inflation down faster.
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