UPDATES WITH MBA CHIEF ECONOMIST'S COMMENTS
By Ovunc Kutlu
ISTANBUL (AA) - The US economy added 142,000 jobs in August, less than market estimates, according to figures released Friday by the Labor Department.
The market expectation for nonfarm payrolls was a gain of 164,000 jobs last month.
Job additions for July were also revised down 25,000, from 114,000 to 89,000.
The unemployment rate decreased to 4.2% in August, from 4.3% in July, and came in line with market estimates.
The number of unemployed people increased to 7.1 million in August, from 5.9 million in July, while the labor force participation rate remained unchanged at 62.7% during that period.
The employment-population ratio, meanwhile, remained steady at 60.0% in August, compared to the month before.
In August, the number of people not in the labor force who currently want a job also stood unchanged at 5.6 million, the Labor Department said in a statement.
"These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job," it added.
Last month, most employment was seen in construction with a gain of 34,000. This was followed by health care with 31,000, and social assistance with 13,000.
In August, average hourly earnings for all employees on private non-farm payrolls increased by 0.4% to $35.21 per hour, compared to July.
That figure showed an annual increase of 3.8%, compared to the same month of 2023.
President Joe Biden later said wages and incomes are rising faster than prices, businesses are investing in the US, and millions of entrepreneurs are opening small businesses with acts of hope and confidence in American economy.
"With inflation back down close to normal levels, it is important to focus on sustaining the historic gains we have made for American workers," he said in a statement released by the White House.
"The Vice President and I are fighting to expand opportunity and grow the middle class. We will keep working to support American workers and businesses, and to lower housing and health care costs for hardworking Americans," he added.
Biden noted that the US economy added nearly 16 million new jobs since he took office.
"The last thing we should do is turn back to the failed trickle-down economics pushed by Congressional Republicans, like cutting taxes for the wealthy and large corporations, raising taxes on middle class families by nearly $4,000 per year, or cutting Social Security, Medicare, Medicaid, and the Affordable Care Act," he added.
Mike Fratantoni, Mortgage Bankers Association's (MBA) chief economist, said the recent employment report confirmed that the US job market is cooling.
He said job growth has slowed to an average 116,000 over the past three months, and that is likely not enough to keep the unemployment rate from rising further.
"It was little changed at 4.2% in August, but we do expect it will increase over the next year, perhaps as getting as high as 5%," he said in a statement.
Fratantoni noted that there were job losses in the manufacturing sector in August, while there were relatively modest job gains in the services sector, and added "This is consistent with a cooling of demand or workers from companies across the board."
"Federal Reserve officials have recently pivoted from a primary focus on inflation to a more balanced view, with concerns both about inflation and employment," he said.
"This report highlights that such a pivot makes sense, and that a 25-basis-point cut at its September meeting is a sensible first step at this time," he added.