Job Growth Slows in August as Unemployment Rises to 3.8%

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The U.S. economy added 187,000 jobs in August, below the 375,000 expected by economists. The unemployment rate rose to 3.8%, the highest since May.

The slowdown in job growth was a surprise, as economists had expected the economy to continue to add jobs at a strong pace. The unemployment rate also rose unexpectedly, despite the fact that many economists had expected it to fall.

There are a few possible explanations for the slowdown in job growth. One possibility is that the Federal Reserve’s decision to raise interest rates is starting to have a negative impact on the economy. Another possibility is that the Delta variant of COVID-19 is starting to weigh on economic activity.

Despite the slowdown, the labor market remains strong. The unemployment rate is still near a 50-year low, and wages are rising at a healthy pace. This suggests that the economy is still growing, albeit at a slower pace than in recent months.

The Federal Reserve is expected to continue to raise interest rates in the coming months in an effort to combat inflation. This could lead to slower economic growth in the near term, but it is also likely to help to bring inflation under control.

Here are some additional details about the August jobs report:

  • The leisure and hospitality sector added 60,000 jobs, the most of any sector.
  • The professional and business services sector added 51,000 jobs.
  • The manufacturing sector added 37,000 jobs.
  • The construction sector added 23,000 jobs.
  • The retail trade sector lost 32,000 jobs.

The August jobs report was the first of three reports that will be released before the Federal Reserve’s next meeting in September. The Fed is expected to raise interest rates by 25 basis points at that meeting.

The labor market is likely to remain a key focus for the Fed in the months ahead. The Fed wants to see strong job growth, but it also wants to make sure that inflation does not get out of control. The Fed will need to carefully balance these two goals in the coming months.

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