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August figures: US labor market is losing momentum

2019-09-06T15:28:25.677Z


Fewer jobs were created in the US in August than expected. By contrast, wage levels in the country are rising more strongly.



The upturn on the US labor market weakened somewhat more sharply than expected in August. It created 130,000 new jobs, the government in Washington said. Economists had predicted a bigger plus of 160,000.

At the same time, the number of jobs for July was slightly revised downwards from 164,000 to 159,000. As a rule of thumb, a job creation of 100,000 a month is considered sufficient to keep pace with population growth. The unemployment rate remained at 3.7 percent in August.

"The job engine is running, albeit a bit slower," said economist Bastian Hepperle of Bankhaus Lampe. The effects of the trade dispute are likely to be visible beyond industry in other industries as well. After the many positive headlines on the US job market, there will be "less to celebrate" in the coming months.

Further interest rate cuts expected

The world's largest economy has already lost considerable momentum in the wake of the international trade conflict. The US Federal Reserve (Fed), which aims to boost full employment and stable prices, is likely to buck the downturn at its next meeting on September 18, economists say. Most recently, in late July, the Fed had cut its key monetary policy rate by a quarter to a range of 2.0 to 2.25 percent.

Wages in August increased by 3.2 percent year-on-year. An increase of 3.0 percent was expected. The month-on-month increase was corrected from 3.2 to 3.3 percent.

Wages and salaries are rising so much as they have not since February

At the same time, wages and salaries in the US rose faster than expected in August. Compared to the previous month, they increased by 0.4 percent, said the US Department of Labor. This is the most significant increase since February. Analysts had expected an average increase of 0.3 percent. On this scale, salaries had risen in July.

Source: spiegel

All business articles on 2019-09-06

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