The US State Department has released a new jobs report. It shows that more jobs have been created in the United States (US) than expected, but the unemployment rate has increased.
Why is this important?When members of the Federal Reserve Board meet to discuss interest rate policy, they look at a variety of factors. The situation in the labor market is one of them. Federal Reserve Chairman Jerome Powell has repeatedly indicated that a cooling labor market is a prerequisite for ending tight monetary policy.
In the message: The US jobs report has both good and bad news.
- First the bad news (at least for the Fed and the markets): 187,000 jobs were added in August, while economists were expecting 170,000 jobs.
- On the other hand, the unemployment rate unexpectedly rose to 3.8 percent. This is the highest level since February 2022.
- More good news: Wage growth was more modest than expected. Wages rose an average of 4.3 percent on an annual basis
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