CHUGGING ALONG

Take Labor Day off: The US job market is doing kinda sorta okay

Like summer turning to fall, the hot US jobs market is cooling down. American businesses added 151,000 jobs in August, down from the pace of more than 270,000 in the previous two months.

Analysts were expecting an August gain of 180,000, so this fell a bit short of that as well. So far this year, the average monthly increase has been 181,000 jobs.

The unemployment rate remained at 4.9% in August, the same as the previous two months:

The participation rate was also unchanged, at 62.8%:

Markets were looking to this data to support the case for an interest rate hike later this month, after Federal Reserve chair Janet Yellen said last week that the case for a hike “has strengthened in recent months.” Speaking in Jackson Hole, Wyoming at an annual meeting of economists and central bankers, Yellen didn’t give a timeline for when interest rates might go up—they were last raised in December—but stressed that the Fed’s decision was dependent on more good economic data.

Today’s so-so jobs report put a damper on forecasts for an imminent hike. Also, average hourly earnings rose 2.4% in August from a year earlier, down from 2.7% in July:

The Fed meets on Sept. 21 to decide on rates, with markets now pricing in just a 24% chance of a move. The odds of a December hike are above 50%, but more data like today’s, combined with other readings like yesterday’s weak numbers on manufacturing activity (paywall) may push the Fed to wait even longer.

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