The August U.S. jobs report showed improvements from July, with a modest decline in the unemployment rate and an improvement in net payroll gains.
The August U.S. jobs report showed improvements from July, with a modest decline in the unemployment rate and an improvement in net payroll gains. With an upcoming Federal Reserve meeting on September 18, this jobs report supports the potential for a 0.25% interest rate cut, even if it dampens hopes of a 0.5% rate cut.Job Report Reflects Improvements In August
The August jobs report was modestly positive, with a payroll gain of 142,000 net new jobs, which was better than the job gains in July. Meanwhile, the unemployment rate fell to 4.2% from 4.3% in July. Unfortunately, there were also some significant downward revisions of 86,000 jobs to the previous two payroll reports.
Despite the downward revisions, this jobs report is not bad news. Fed rate cuts are coming, and the U.S. labor market looks less at risk than it did just a month ago. However, the modestly positive nature of this report is likely to reduce the probability of a 0.5% Fed rate cut on September 18.
This jobs report—with modestly rising payrolls and a low unemployment rate—is not likely weak enough to warrant a 0.5% rate cut, especially with low jobless claims and almost 7.
