By Joyce Yu
Philadelphia, PA–The U.S. economy added fewer jobs than expected in August, with wage increase less than forecast, according to the latest job report. Jobless rate also rose.
Wall Street climbs after the release of the job report. All three indices jumped more than 0.2% at open.
Nonfarm payrolls rose by 156,000, below the median estimate of 180,000 in a Bloomberg survey of economists. 41,000 jobs were deducted in the revisions for the prior two months data, showed in the report released by the Labor Department on Friday.
The unemployment rate rose from 4.3% to 4.4 %.
Average hourly earnings grew 0.1 percent from July, but this is below the median projection of a 0.2 % gain and translated into an annual rate of 2.5 percent which is less than expected.
Despite disappointing figures, one bright spot was manufacturing, which added 36,000 jobs, the highest in five years.
“This was a softer report, but it doesn’t change the overall picture, which is the economy and the labor market are in good shape,” Gus Faucher, chief economist at PNC Financial Services Group Inc. in Pittsburgh shared in a Bloomberg report.
“August tends to be a little bit softer, so we can certainly see an upwards revision over the next couple of months,” and wage growth will accelerate as the labor market tightens, he said.
August’s gains were far more than the 75,000 to 100,000 jobs per month needed to keep up with growth in the working-age population, according to a Reuters report.
In the past several years, the initial August job count has tended to exhibit a weak bias, with revisions subsequently showing strength, the same report noted.
Most Asian markets closed in their positive territories overnight, and European markets have followed the suit this morning.
The Dow Jones industrial average closed 0.3% higher on Thursday, extending its monthly win streak to five. The S&P 500 gained 0.6% and the Nasdaq added 1% at close.
U.S. gasoline prices rose further yesterday as flooding caused by Harvey forced the closure of major oil refineries. Gas prices have climbed 10 cents a gallon, and some pumps in Texas have ran out of supplies, according to a CNN report.
While Harvey has caused temporary job losses along the Gulf Coast, the effect was not reflected in today’s report.
More data coming out today is the economic sentiment report by the University of Michigan.
Separately, the second round of NAFTA renegotiation is set to begin. Trump has earlier said he would probably need to terminate the agreement as the deal is unfair to American workers.
