The Employment Situation in August – Not Too Hot, Not Too Cold

The labor market had its Goldilocks moment in August as payroll employment growth cooled from an overheated pace in June and July but maintained enough warmth to still satisfy.

The Bureau of Labor Statistics (BLS) reported payroll employment rose by 151 thousand in August and the unemployment rate held steady at 4.9%. Payrolls for June and July were revised downward by a total of one thousand. The average of payroll gains over the last three months was 232 thousand, in line with the last several calendar quarters. The labor force expanded by 176 thousand after gains over 400 thousand in the preceding two months, while the number of employed persons in the household survey expanded by 97 thousand.

This moderation but continuation of strength in payroll growth is unlikely to motivate the Federal Reserve to raise its benchmark interest rate at its upcoming September meeting, but it’s also unlikely to dissuade the Fed from a rate hike later in the year, most likely December. For now the pace of job growth is just right.

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