US adds a strong 201K jobs; unemployment stays at 3.9 pct

US adds a strong 201K jobs; unemployment stays at 3.9 pct

Hiring rebounded in August as employers added 201,000 jobs and the labor market continued to defy worker shortages and USA trade battles. Analysts polled by Thomson Reuters anticipated an additional 191,000 jobs with the unemployment rate decreasing to 3.8 percent from July's 3.9 percent.

Economists surveyed by Bloomberg expected 195,000 payroll gains.

The unemployment rate was 6.0 per cent compared with 5.8 per cent in July. June's gain was lowered from 248,000 to 208,000 and July's from 157,000 to 147,000.

And while August's report was an overall strong reading for the us economy, the labor force participation was a disappointment, dropping to 62.7%. In recent years, Labor has revised up its initial estimates for August, often significantly. They increased payrolls by 18,000 jobs in July.

Government payrolls decreased by 3 000.

The Trump administration has imposed tariffs on imported steel and aluminum as well as on $50 billion of goods from China. The average hourly wage increased by 2.9 percent over the past year.

Wage growth accelerated, with hourly earnings rising 2.9 percent year-over-year. The large increase could indicate that wage growth is finally picking up more rapidly amid an intense competition for workers.

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Following Friday's report stock futures were lower and Treasury yields higher as investors see this report as indicating a more inflationary economic environment, one that is unlikely to see the Fed change its plans to raise rates two more times this year. Wages have been closely tracked for signs of building inflation pressures in the economy. Wholesalers added 22,400 jobs.

August's job gains were driven by professional and business services as well as health care and wholesale trade. Healthcare added 41,000; transportation and warehousing, 20,000; and leisure and hospitality, 17,000.

Notably, the manufacturing sector lost about 3,000 jobs in August. But construction added 23,000 jobs despite dire worker shortages as builders continue to respond to low housing supplies. That gauge includes part-time workers who'd prefer a full-time position and people who want a job but aren't actively looking. Of those, 1.3 million have been out of work for 27 weeks or longer.

The improvement likely shows the strong labor market is helping underemployed as well as jobless Americans.

"There is certainly nothing in this report that would tell the Fed they shouldn't move ahead with their plans to raise rates", said Betsey Stevenson, a labor economist at the University of MI who served on the White House Council of Economic Advisers during the Obama administration. But monthly additions are still averaging a muscular 207,000 this year. This is the best annual private wage growth figure since May 2009.

"With the tax cuts and spending increases creating a sugar high, there is little reason to expect labor demand to moderate over the rest of this year or even in the first half of next", said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

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