September 2015 Jobs Report: 173k Jobs Added in August

Posted by Paladin on September 08, 2015

In August, the U.S. economy created a weaker-than-expected 173,000 jobs while the official unemployment rate dipped to 5.1 percent from 5.3 percent the previous month. Wall Street and economists had expected a 220,000 increase in new jobs. On Sept. 4, the Dow Jones Industrial Average fell 272.38 points, or 1.7 percent—the same day the jobs report was released.

Jobs Report for September 2015 - Chart Showing 173,000 New Jobs Added in August

Modest wage increases

“Over the past 3 months, job gains have averaged 235,000 per month,” BLS said back in August. But a lack of wage increase depicts a concerning trend for many economists and U.S. households. Average hourly earnings rose by 0.3 percentage point in August. But trends from the past two years have shown lackluster increases in earnings for American workers when compared to prior years.

The jobless rate of 5.1 percent is fueling speculation in some quarters that the Federal Reserve may increase interest rates for the first time since 2006. However, a record 94 million Americans did not participate in the labor force in August—261,000 more than July. Also, the labor force participation rate remains at 62.6 percent, a 38-year low.

Jobs Report for September 2015 - Chart Showing National Unemployment Rate January through August 2015

Upcoming decision from the Federal Reserve

The central bank will have a closely scrutinized meeting on Sept. 16 and 17.

But borrowing costs will likely continue to remain very cheap in the foreseeable future. Nervousness in the global markets over the past month may be a major driver in the Feds’ decision, along with a historically strong dollar. There is growing pressure to help U.S. exporters sell products overseas, and to not rattle investors by raising interest rates.

“Employment in professional and business services continued to trend up in August (+33,000) and has increased by 641,000 over the year,” according to BLS’s Sept. 4 report.

Posted in: Jobs Reports, Monthly Economic Reports

Post a comment