US economy adds 173,000 jobs as unemployment rate drops to 5.1%
Washington (Sept 4) The US economy added 173,000 jobs in August, less than expected, while the unemployment rate dropped to 5.1%, meeting expectations.
The numbers released by the Department of Labor on Friday are likely to complicate matters for the Federal Reserve, which meets later this month and was expected to raise interest rates for the first time since the recession laster this year. The latest jobs report is the last before the Fed meets later this month.
Economists had expected the non-farm payroll figures to increase by 220,000 jobs and the unemployment rate to reach a seven-and-a-half year low of 5.2% in August. An increase below 200,000 jobs comes as the Fed is also considering the impact on the US economy over continued anxiety about the weakening Chinese economy.
Worries over China and rising rates have caused panic on global stock markets. In August the Dow Jones Industrial Average had its worse month
A week ago, while speaking at an annual conference in Jackson Hole, Wyoming , Fed vice-chairman Stanley Fischer said that “the door is definitely open” to an interest rate increase in September . However, in an interview with CNBC , he added that “the change in circumstances which began with the Chinese devaluation is relatively new and we are still watching how it unfolds”.
“I wouldn’t want to go ahead and decide right now what the case is,” he said.
Related: US stock markets finish down to close out worst August in three years
August 2015 was the worst for three years on the US stock markets. The Dow Jones had gone on to plunged 2.8% on Tuesday, then rallied early on Thursday only to drop again by the end of the day with investors remaining cautious about today’s jobs report.
US stock markets all fell on Monday, ending the worst August in three years .
“Despite the stock market volatility this month and the growing cracks in China’s economy... we don’t see any signs of slowing in the labor market yet,” said Andrew Chamberlain , chief economist at Glassdoor in San Francisco .
A Reuters analysis found that August employment reports between 2005 and 2014 often underestimated jobs growth initially and were often revised up in the next month’s report.
“Over that period, on average the government found 58,000 more jobs added to payrolls in August than initially figured. Job growth in August was revised lower only in 2005 and 2008,” according to Reuters.
Source: Reuters
