U.S. job growth fell well short of economic estimates in the month of August, according to a closely watched report released by the Labor Department on Friday.<\/p>\n
The Labor Department said non-farm payroll employment rose by 235,000 jobs in August after soaring by an upwardly revised 1.053 million jobs in July.<\/p>\n
Economists had expected employment to jump by about 750,000 jobs compared to the spike of 943,000 jobs originally reported for the previous month.<\/p>\n
The substantial slowdown in the pace of job growth came as employment in the leisure and hospitality sector was unchanged in August after surging up by 415,000 jobs in July.<\/p>\n
The report also showed government employment edged down by 8,000 jobs in August after jumping by 255,000 jobs in the previous month.<\/p>\n
Additionally, the Labor Department noted job growth in the professional and business<\/span> services, transportation and warehousing, private education, and manufacturing sectors was partly offset by a loss of jobs in the retail sector.<\/p>\n “The drop-off in high contact services employment growth suggests that, even though few States have re-imposed restrictions beyond mask mandates, the Delta variant is nevertheless weighing on activity by scaring off customers,” said Paul Ashworth, Chief U.S. Economist at Capital Economics.<\/p>\n Despite the much weaker than expected job growth, the unemployment rate fell to 5.2 percent in August from 5.4 percent in July, matching economist estimates.<\/p>\n The unemployment rate once again dipped to its lowest level since hitting 4.4 percent as the coronavirus<\/span> pandemic intensified in March of 2020.<\/p>\n The drop in the unemployment rate came as household employment jumped by 509,000 persons, while the labor force rose by just 190,000 persons.<\/p>\n “While the Delta variant is driving renewed virus fear, the labor market recovery seems unlikely to go into reverse,” said Lydia Boussour, Lead US Economist at Oxford Economics. “Still, a slower pace of hiring amid a rapidly spreading Delta variant will warrant a patient tapering approach from the Fed.”<\/p>\n She added, “We believe The FOMC will opt to wait until the November meeting to make a formal tapering announcement, and start reducing asset purchases in December or January, depending on employment progress and inflation developments this fall.”<\/p>\n The report also said average hourly employee earnings increased by $0.17 or 0.6 percent to $30.73 in August. Annual wage growth accelerated to 4.3 percent in August from 4.1 percent in July. <\/p>\n