The U.S. economy created 156,000 jobs in August versus a projection of 180,000. July payroll growth was revised downward from 209,000 jobs to 189,000 and the unemployment rate ticked higher to 4.4% from 4.3%.
Manufacturing and construction job growth remained relatively solid, but weaker wage growth in those areas also held back overall wage gains. A quirk in the seasonal adjustment process may provide part of the reason for the weak numbers. In the previous seven years, August job growth was revised upward in subsequent months.
The numbers take into account data through August 12th and so does not include any impact from Hurricane Harvey.
“This was a softer report, but it doesn’t change the overall picture, which is the economy and the labor market are in good shape,” said Gus Faucher, chief economist at PNC Financial Services Group Inc. in Pittsburgh. “August tends to be a little bit softer, so we can certainly see an upwards revision over the next couple of months,” and wage growth will accelerate as the labor market tightens, he said.
The payrolls figure is a “decent number, in line with a labor market that’s gradually maturing,” said Greg Daco, chief U.S. economist at Oxford Economics, who projected a 160,000 increase. “Demand for labor is still solid. Wage growth remains modest.”
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