The United States created 187,000 new jobs in August and unemployment rose to 3.8%

The unemployment rate in USA It rose three tenths in August and stood at 3.8%, according to data published today, Friday, by the Bureau of Labor Statistics (BLS).

The net creation of new jobs stood at 187,000 positions, a figure slightly higher than those created in July since the figure for that month was revised to 157,000 jobs created, 30,000 less than previously estimated.

The figure is, however, well below the average number of jobs created in the last twelve months, 271,000, a situation that confirms the slowdown in the labor market as a result of interest rate increases.

The new jobs were in the health care sectors, which added 71,000 new jobs in August; leisure and hospitality (40,000 new jobs), social assistance (26,000) and construction (22,000).

With these figures, the number of unemployed people increased by 514,000 and stood at 6.4 million in August.

Average hourly earnings increased 8 cents, or 0.2%, in August to $33.82 per hour. In the last twelve months, the average hourly wage has increased 4.3%.

At a public event, the American president, Joe Bidencelebrated the data since, despite the rise in the indicator, solid job creation continues.

The president recalled that since his arrival to the Government in January 2021, 13.5 million jobs have been created, around 800,000 of them in the manufacturing sector.

“We created more jobs in two years than any president has ever created in a single four-year term. “We did it in two years,” he claimed.

Fewer positions created

Despite the political praise, figures show that since last January, when almost half a million jobs were created, there has been a slowdown in job creation, a sign that the labor market is cooling.

This situation is in line with the objectives of the Federal Reserve (Fed), which has carried out eleven interest rate increases in the last year and a half to reduce inflation.

The US central bank decided in July to resume rate increases after a pause in June, with an increase of 0.25 percentage points, so that they were placed in a range between 5.25% and 5.5%, reaching their maximum level since 2001.

In his last public intervention within the framework of the Jackson Hole (Wyoming) forum, the president of the Fed, Jerome Powellstated that the regulator will continue to maintain high rates until inflation is controlled, although it opened the door to a possible pause in the increases.

“In the next meetings we will evaluate our progress based on the totality of the economic data and the evolution of the perspectives and risks. Based on this assessment, we will proceed cautiously in deciding whether to tighten monetary policy further or instead hold the rate,” he said.

Powell explained that to decide whether to raise rates at their next meeting that will take place on September 19 and 20, both inflation data and unemployment figures will be taken into account.

Will the Fed pause the rate hike?

According to economists, the increase in the unemployment rate and the slowdown in job creation could tip the Fed’s balance towards a pause in increases.

As economist Richard Roberts, professor at Monmouth University and former Federal Reserve executive, points out to EFE, “today’s figures are good news for the Fed and will probably lead it to keep rates stable at its meeting at the end of September.” .

However, he adds, the regulator “will need additional solid data” that inflation will return to 2% before “cancelling future interest rate increases.”

“I think we will see at least one additional rate increase by the end of the year as economic growth remains healthy,” he says.

In the opinion of Craig Erlam, analyst at Market Pulse, there are “many reasons for optimism.” “If there was any doubt that the Federal Reserve would pause in September, today’s data surely puts that debate to rest.”

Yohay Elam, StreetFX analyst, recalls that the Fed still has almost three weeks until making a decision in September, and during this time the Consumer Price Index (CPI) data will be published, key to its response.

“But an extraordinarily high CPI would be necessary for the bank to raise its rates in September,” he says. The information will be known on the 13th.