U.S. Nonfarm Payrolls Added 151,000 jobs in August Slightly Below Expectations

Reuters reported that U.S. employment growth slightly slowed in August after two consecutive months of robust gains. It was also reported that wage gains moderated. These facts may influence  the Federal Reserve's decision to raise interest rates this month.

Nonfarm payrolls added 151,000 jobs in August which was a decline from July's 275,000  jobs. The Labor Department said that hiring in manufacturing and construction sectors slowed down, although the unemployment rate remained at 4.9 percent because more people entered the labor market. On the other hand, government payrolls rose 25,000 in August, extending the streak of job gains in the public sector to four months.

The participation rate of the labor force, or the share of working-age Americans who have jobs or at least seeking to be employed was unchanged at 62.8 percent in August.

Economists surveyed by Reuters had estimated that payrolls might rise to 180,000 in August while the unemployment rate might slip to 4.8 percent. Reuters speculates that Augusts' jobs gains, however, could still be enough to motivate the Fed to raise interest rates this coming December.

The apparent slow down in employment comes after the economy added a total of 546,000 jobs last June and July. Fed Chair Janet Yellen has said that the US economy needs to create just under 100,000 jobs a month to keep up with population growth.

The smaller-than-expected rise in payrolls also likely reflects difficulties adjusting the data for seasonal fluctuations. Over the last several years, the government's August payrolls estimates have been weak only to be subsequently revised higher Reuter said.

The timing of the next rate hike could also be determined by wage growth. Average hourly earnings increased three cents or 0.1 percent in August after a solid 0.3 percent rise in July.

Americans worked fewer hours in  August, with the average workweek decreasing to 34.3 hours from 34.4 hours in July.