WASHINGTON (AP) — U.S. employers slowed their hiring in August and barely raised wages. They added a modest 151,000 jobs, about half the blockbuster gains of the two previous months.
The slowdown in job growth reduces the likelihood that the Federal Reserve will raise interest rates when it meets later this month.
The unemployment rate remained 4.9 percent for a third straight month, the Labor Department said Friday in its monthly jobs report.
The job gain was far below July’s 275,000, which was the most in eight months, and June’s increase of 271,000. Still, over time, the current pace of hiring is enough to lower the jobless rate over time.
Job gains slowed across most major industries, and employers cut workers in manufacturing, construction and mining.
Hourly wages barely increased in August and have risen just 2.4 percent in the past year, slightly lower than the previous month’s pace.
Even with last month’s deceleration, hiring has been strong for the past year, and economists are unlikely to be particularly concerned by one month’s figure.
The August jobs report has typically come in below economists’ expectations and is usually revised higher in the following months. Over the past five years, it has typically been revised higher by about 70,000.
Fed officials have noted the economy’s improvement and the decline in the unemployment rate to nearly healthy levels. Fed Chair Janet Yellen said in a speech last month that “the case for an increase … has strengthened in recent months.”
Still, inflation remains far below the Fed’s target of 2 percent, potentially delaying higher rates.
Other recent economic data has been mixed, though most analysts forecast a pickup in growth after a sluggish start to the year.
Consumers are more confident and have been spending at a steady clip. The Conference Board said this week that its measure of consumer confidence reached an 11-month high in August.
Americans are particularly optimistic about the job market, the Conference Board’s survey found, with the percentage of Americans saying jobs are “plentiful” reaching the highest level in nine years.
Yet businesses remain cautious and are not investing in new plants, equipment or computers, dragging down factory output. A private survey found that manufacturing shrank in August as new orders and production plummeted.
Americans are willing to make big purchases, such as homes and cars, but sales of both may have plateaued. Sales of existing homes slipped in July, after reaching a nine-year high in June. And auto sales have leveled off this year after reaching a record high in 2015.