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Job growth slowed in August but economy still looks solid

02 September 2017

The Labor Department said Thursday the USA economy created 156,000 jobs in August and unemployment remained at 4.4%, matching a near 16-year low set in June.

Job gains in June and July were revised downward by 41,000 jobs.

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

Employers in the USA added a less-than-expected 156,000 net new jobs.

Underscoring labor market strength, manufacturing payrolls surged by 36,000 jobs.

Employment in the fields of construction, professional and trade services, mining and health care each rose in August, continuing a five-month trend.

Harvey threatens more USA oil refineries after heavy rains
According to Bloomberg , oil traders booked 20 tankers from European suppliers since August 26, double the average for August. Officials said the refinery, which hasn't been shutdown by the historic flooding, requested the release of emergency oil.

The unemployment rate crept up to 4.4% from the 16-year low of 4.3% reached last month, as fewer adults reported that they had a job during the month. Wages continued to grow at an annual rate of 2.5 percent. A sub-4 percent unemployment rate by this time next year is a real possibility. Most economists expect the Fed to begin shrinking its balance sheet in September, with a further rate hike in December, according to the latest survey conducted by the Wall Street Journal.

The August report does not include any effects from Hurricane Harvey, as the collection of the data used for the report was completed before the storm struck.

Looking through monthly volatility, year-over-year employment growth hit its lowest level since mid-2013 in August.

Year over year, the number of people not in the labor force rose from 94.35 million while the number of people who now want a job rose from 5.42 million to 5.84 million. Retailers hired just 800 workers.

The figures made for disappointing reading for Donald Trump, who hasput jobs and wage growth among the top priorities for his administration. 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. The rate is still down half a point from a year ago and twice that when including sources of "hidden unemployment" like discouraged workers. Despite ostensibly tighter labour markets, wage growth has been stuck at 2.5% over the last 5 months, similar to the 2.6% average increase previous year.

Job growth slowed in August but economy still looks solid