WASHINGTON (MarketWatch) — The pace of hiring in the U.S. slowed sharply in August as the economy added just 151,000 jobs, a smaller than expected increase that may prompt the Federal Reserve to keep interest rates at current low levels until after the presidential election.
The increase in new jobs last month fell short of Wall Street’s forecast. Economists polled by MarketWatch had forecast a 173,000 gain.
Hiring was expected to taper off after blistering gains in July and June in which more than a half-million new jobs were created. Hiring slowed in August in most major industries while energy producers, manufacturers and construction firms cut jobs.
The unemployment rate was unchanged at 4.9%, the government said Friday.
Top Fed officials are likely to view the August jobs report as a reason to proceed with caution, though they are unlikely to take it at face value. Job creation has been slower in August than any other month in the past two decades.
One reason: A frenzy of summer vacations make it harder for government economists to determine how many people were hired.
Other labor market reports such as weekly jobless claims and job openings show that the labor market is still the strongest it’s been in years.
Still, the Fed will probably wait to see if there’s a bounce back in hiring in September before making its next move. The central bank is keen to raise its benchmark short-term rate soon as an insurance policy of sorts to prevent the economy from overheating.
A broader measure of unemployment known as U6 was flat at 9.7%, the government said Friday.
Average hourly wages rose 0.1% to $25.73. Hourly pay increased 2.4% from August 2015 to August 2016.
Total employment gains for July and June, meanwhile, were barely changed. The government said 275,000 new jobs were created in July instead of 255,000. But June’s gain was cut to 271,000 from 292,000.
