Employers Added 169,000 Jobs in August

Employment picture remains muted, with moderate growth.

In this photo from Aug. 14, 2013, job seekers check out companies offering more than 2,000 job opportunities at a job fair in Miami Lakes, Fla.
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Employers added 169,000 jobs in August, with the unemployment rate falling slightly to 7.3 percent, the Labor Department reported Friday.

Economists had been expecting payrolls to rise by around 175,000, continuing the steady upward trend of recent months, with the unemployment rate holding steady at 7.4 percent.

[READ: Applications for U.S. Jobless Aid Near 5-Year Low]

In July, payrolls were initially reported to have swelled by 162,000 jobs, down from the prior month's increase of 188,000. That number was revised markedly downward to 104,000 and the June number was trimmed to 172,000.

Retail and health care led the industries posting the best job gains in August, at 44,000 and 33,000, respectively. The length of the average workweek edged up slightly, along with wages but not at a pace to suggest anything other than modest expansion.

The jobs report follows other recent economic reports that were considerably more rosy, including one Wednesday from the Federal Reserve's "beige book" which found the economy was expanding at a "modest to moderate" pace. The Commerce Department recently revised second-quarter economic growth upward to an annualized rate of 2.5 percent.

[READ: Full-Time Employment for Young Americans Is Decreasing]

Additionally, the Institute for Supply Management said Thursday its survey of purchasing managers – the businesspeople who buy supplies for their companies – climbed to 58.6 percent in August from 56 percent in July. That's the highest level since the index was created in 2008.

"The outlooks for both the U.S. economy and the global economy are falling into place," Manufacturers Alliance for Productivity and Innovation Chief Economist Daniel J. Meckstroth said in a statement Thursday. "First half GDP growth in the U.S. was slow because of a number of factors—an increase in the payroll tax, the early effects of sequestration, and states' austerity—taking a substantial amount out of the growth rate. But the payroll tax effect is diminishing and the sequester effect was not as disruptive as forecast; the government seems to be working around it. Additionally, Europe appears to be coming out of recession."

Stock future pared morning gains on the news, then recovered somewhat ahead of the morning opening.

Thursday, payroll processor ADP reported that its own survey found that employers added 176,000 jobs in August, down slightly from the forecast number of 180,000.

The August jobs report is the last before the Sept. 17-18 meeting of the Federal Reserve. The mixed employment picture will add to the debate over whether the Fed will begin its much anticipated "taper" or winding down of its $85 billion in monthly purchases of securities aimed at keeping interest rates low.

"It's rare that a Fed decision hangs on just one report," Jeffrey Kleintop, chief market strategist for LPL Financial, said in an email. "But with the Fed divided on announcing a taper, this last major piece of data on the health of the labor market ahead of [its] Sept. 17-18 policy meeting takes on enormous significance."

At a time of restrictive fiscal policy and federal government budget cutting in Washington, the Fed has provided the only real ignition to the economy in recent months. Interest rates have been rising over the summer in anticipation of the Fed's switch in policy.

 

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