TAYLOR GIORNO
The U.S. added 187,000 jobs and the unemployment rate rose to 3.8 percent in August, according to data released Friday by the Labor Department.
The jobs report showed the labor market plateaued in August as the Federal Reserve considers another interest rate hike. Economists expected the U.S. to have gained 170,000 jobs and maintain the July jobless rate of 3.5 percent, according to consensus estimates.
While the jobless rate rose 0.3 percentage points in August, the labor force participation rate rose 0.2 percentage points after being largely flat since March.
The Fed has hiked interest rates to their highest level in more than two decades as part of its crusade to cool off an economy overrun by inflation a year ago.
Inflation ticked up slightly in July, according to Commerce Department’s personal consumption expenditures price index released Thursday, although it has fallen from its peak of 9.1 percent last summer.
As Fed officials consider another rate hike, they are looking for signs that the job market is slowing under the weight of past increases.
Job openings fell below 9 million for the first time in more than two years, and the rate of Americans quitting their jobs was the lowest it’s been since January 2021, according to the Job Opening and Labor Turnover Survey released Tuesday.
Fed Chairman Jerome Powell said the banks fight against inflation is “incomplete” during his speech at a gathering of central bank officials in Jackson Hole, Wyo., last week.
“Getting inflation sustainably back down to 2 percent is expected to require a period of below-trend economic growth as well as some softening in labor market conditions,” Powell said.
The Fed is hopeful that the U.S. can return to low inflation without the economy falling into a recession. Powell and Fed officials have acknowledged their rate hikes could force the economy into a serious downturn.
The fate of the Fed’s inflation fight could weigh heavily on the 2024 election.
President Biden and Democrats are attempting to defend control of the White House and Senate in part by citing the rapid economic rebound from the COVID-19 recession.
Republican lawmakers and presidential candidates, however, have blamed Democrats for stoking the high inflation seen in the U.S. and throughout the world over the past two years.
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