US economy adds 142,000 jobs in August

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The US economy added 142,000 jobs in August, latest figures from the Bureau of Labor Statistics reveal, missing expectations.

The unemployment rate dipped to 6.1% from 6.2% in July.

The world's largest economy had been averaging a monthly jobs gain of 212,000 in the previous 12 months.

Part of the sluggish jobs growth was attributed to a loss of 17,000 food and beverage jobs as a result of a supermarket store strike.

Thousands of employees of the Market Basket chain of supermarkets in the northeastern US had gone on strike in July to protest the firing of their boss. The dispute was resolved late last week.

US markets did not react strongly to the news, with all three indexes dipping just slightly lower in early morning trading in New York.

Bright spots

There were some bright spots in the August jobs report: wage growth, a crucial sign of the strength of the US economy, ticked up slightly.

Average hourly earnings are now growing at 2.1% year over year. US Federal Reserve chair Janet Yellen has previously indicated that wages are a crucial factor in the Fed's analysis of the state of the health of the US jobs market.

Employment in the car industry also dipped less than expected, as fewer workers were laid off for factory retooling.

Jobs growth in the professional and business services also continued to lead the recovery, with an additional 47,000 jobs adding in August, bringing the yearly total to 639,000.

Analysis: Andrew Walker, BBC Economics Correspondent

"Disappointing" was how the jobs figure was described by a number of analysts. Employment growth was sharply below the previous six months.

It was not much better than what's needed to keep up with the growth in the working age population.

There are other features of the US labour market that suggest it is still weaker than what's implied by the moderately low headline unemployment rate.

The numbers of people who want to work longer hours or have been unemployed for more than six months are unusually high.

The new figures will reinforce the reluctance of the Federal Reserve chief Janet Yellen to move soon to raise official interest rates from the current very low level of close to zero.

 

Federal Reserve chair Janet Yellen recently warned of "slack" in the US jobs market

'Wind out of the sails'

Most analysts believe that the sluggish August figure will give central bankers pause for thought as they consider when to end the Fed's extraordinary support of the US economy.

The central bank is scheduled to meet on 16-17 September.

Many have wondered whether or not so-called "hawks", who favour increasing interest rates, would be able to persuade other members of the committee to move forward the bank's plans to raise interest rates from their historically low levels of 0%.

"This should take some wind out of the sails for the [Federal Open Market Committee] hawks," wrote investment bank Jefferies economists' in a note to clients.