August 2024 Jobs Report: Latest Updates and Analysis
The U.S. economy added slightly fewer jobs than anticipated in August, signaling a slowdown in the labor market and potentially paving the way for the Federal Reserve to reduce Interest rates later this month.
According to a report from the Labor Department’s Bureau of Labor Statistics, nonfarm payrolls increased by 142,000 in August, falling short of the consensus forecast of 161,000.
The unemployment rate did edge down to 4.2%, in line with expectations. The labor force grew by 120,000, contributing to the decline in the unemployment rate, though the labor force participation rate remained unchanged at 62.7%. The alternative measure, which includes discouraged workers and those working part-time for economic reasons, rose to 7.9%, its highest level since October 2021.
The household survey showed a growth in employment of 168,000, with part-time employment increasing by 527,000 and full-time employment decreasing by 438,000.
While the markets initially showed little reaction to the data, stock futures and Treasury yields later declined. There were significant downward revisions to the previous two months, with July’s total revised down by 25,000 and June by 61,000.
Construction led in job growth with 34,000 additional jobs, while manufacturing lost 24,000 jobs. Average hourly earnings increased by 0.4% on the month and 3.8% from a year ago.
The report comes amid uncertainty over the Federal Reserve’s next steps, with markets anticipating a rate cut at the upcoming meeting in September.
Most Fed officials have suggested a cut in rates, with New York Fed President John Williams endorsing rate cuts in his recent speech.
Overall, the data indicates ongoing economic growth but a slowdown in the labor market, paving the way for potential rate cuts by the Federal Reserve.
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Lucas Bennett, completed his Finance degree at Bocconi University in Italy in 2018. He is highly skilled in corporate finance and risk management, beginning his career at a hedge fund in Milan. Lucas expertise extends to consulting for leading European firms, particularly within the energy markets sector. His analytical skills and strategic mindset have made him a sought-after consultant, and he continues to explore new opportunities within the financial services industry across Europe.