The economy added 130,000 jobs during the month of August, sharply missing expectations and showing continued softening in the labor market in the face of global economic headwinds.
According to figures released Friday by the Bureau of Labor Statistics, the unemployment rate remained steady at 3.7 percent, still the lowest in almost five decades. Wage growth, which has remained sluggish all year, stayed at 3.2 percent.
“America is working,” Larry Kudlow, director of the National Economic Council, told CNBC in an interview — while also cautioning that August is a “quirky” month for jobs numbers.
While the economy only requires around 100,000 jobs per month to keep pace with the working population, it has gained around 165,000 jobs a month so far this year — much lower than the average of 223,000 in 2018. Friday’s employment report also revised down the last two months’ figures: July’s total was reduced to 159,000 from 164,000 jobs gained, and June shrank to 178,000 positions. May’s total had previously been revised down by 10,000 to just 62,000 new jobs added that month.
Temporary hires for the U.S. Census contributed to August’s jobs total, with the Department of Labor noting that 26,000 people were hired last month for door-to-door canvasing. The 2020 Census will eventually require almost half a million temporary workers.
“This miss in the jobs report tells us that a lack of confidence in the economy’s longer-term health is taking a sustained toll on business owners’ outlooks,” said Steve Rick, chief economist at CUNA Mutual Group. “And given the Fed’s rate cut in July, the looming pressure from tariffs, increasing market volatility and a middling international economic landscape, we’re starting to feel enough turbulence to justify their anxieties.”
All eyes on Wall Street now turn to Federal Reserve Chairman Jerome Powell, who is scheduled to give a speech later on Friday in Zurich about the global economic outlook.
The Fed is largely expected to implement another rate cut at its next monetary policy meeting, on Sept. 17-18 in Washington. Fed officials sliced the rate by one-quarter of a percentage point in July at its last meeting, with Powell characterizing the move as a “midcycle adjustment to policy” due to global trade tensions. That comment contributed to an immediate 470-point plunge on the Dow Jones Industrial Average.
The last time the central bank slashed the rate was in December 2008, during the Great Recession. Rates remained at levels near zero for seven years before the Fed began a series of increases, beginning in December 2015.
President Donald Trump continued his lambasting of the Fed on Friday, tweeting “Where did I find this guy Jerome?” Trump, who has made a strong economy one of the central tenets of his presidency, has long claimed that the Dow would be “10,000 points higher” if the Fed had started to reduce rates earlier.