Job creation in August falls to 156000, lower than 2017 average

Luke Sharrett  Bloomberg

Job growth in the U.S. came in well below economist estimates in the month of August, according to a closely watched report released by the Labor Department on Friday.

In recent years, August has been one of the weaker months for the jobs report relative to expectations due to seasonal adjustment issues.

The preceding three-month average of jobs added is 184,000, which puts the August number about 15 percent down by comparison.

Wage growth was also a disappointment, with average hourly earnings rising 0.1% over the prior month and 2.5% over previous year.

The department said Hurricane Harvey, which devastated parts of Texas, has no "discernable" effect on payrolls as the disaster struck after the survey period for the August employment report.

The number of Americans working part-time for economic reasons fell by 27,000 to 5.26 million. Earnings were expected to rise 0.2% over the prior month and 2.6% over the prior year.

As a result, the average monthly employment gain for 2017 has been 176,000.

The growth in jobs continued the streak for the USA economy, which has not seen a negative month on job creation since September of 2010 - nearly seven straight years.

August was expected to be a weak month for job creation, but it was worse than that.

As for where the jobs were added, the BLS says the biggest gain was in manufacturing, with 36,000 jobs. In August, job gains occurred in computer systems design and related services (+8,000). The unemployment rate, while still low, inched up a little to 4.4%. Specifically, policymakers have been looking for signs of accelerated wage growth, which has been stuck around 2.5 percent for most of the year.

Economists polled by Reuters had forecast payrolls increasing by 180,000 jobs last month. The average hourly wage crept up only a few pennies to $26.39, but a drop in the length of the average work week means the average worker's weekly paycheck actually got slightly smaller. There are further potential pitfalls ahead, as Washington faces a showdown over the debt ceiling, a statutory limit on how much money the USA can borrow that can only be increased by Congress, which could rattle markets, and delay action by the Fed.

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