MNI BRIEF: Weaker Aug US Jobs Report Paves Way To Fed Cut

U.S. hiring cooled again in August and the unemployment rate ticked a tenth higher, paving the way for an interest rate cut from the Federal Reserve as soon as this month. 

Employers added just 22,000 jobs last month, down from a revised 79,000 in July, the Bureau of Labor Statistics said Friday. June hiring was revised down to -13,000, the first time the economy lost jobs since December 2020. The net revisions for the previous two months were -21,000, bringing the three-month average hiring rate to 29,000. 

Private employers created 38,000 jobs while government lost 16,000 jobs. Health care led gains with 31,000, but that was below the average monthly gain of 42,000 over the past 12 months, the BLS said. Growth in average hourly earnings came in as expected at 0.3% on the month and 3.7% over the year. 

The unemployment rate rose to 4.3% after staying in a 4.1%-4.2% range for over a year, and the broad U-6 unemployment rate rose to 8.1%, the highest since October 2021. The number of long-term unemployed was 1.9 million in August and has increased by 385,000 over the year, the BLS said. 

Fed Chair Jerome Powell signaled last month interest rates are about to adjust, and many FOMC members have said they're open to a cut this year. (See: MNI POLICY: Fed Takes Measured Approach To Post-September Cuts)