The unemployment rate rises to 3.8% – the highest in 18 months – and the economy adds 187,000 jobs in August as the labor market continues to cool
The unemployment rate in the US has risen over the past month, a sign that the overheated labor market is returning to room temperature.
The unemployment rate rose to 3.8 percent in August, up from 3.5 percent in July and the highest level since February 2022, the Labor Department said in its report on the employment situation on Friday.
Employers added 187,000 new jobs last month, more than economists had expected, and an increase from July’s 157,000, a figure revised down by 30,000.
But the rising unemployment rate suggested job seekers were spending more time between positions as job openings fell from last year’s staggering levels when employers were desperate to hire workers.
“We’re slowly starting to see this slide into a cooler job market,” said Becky Frankiewicz, chief commercial officer at employment agency ManpowerGroup. “Make no mistake: the question cools down. … But it’s not a free fall.’
The unemployment rate in the US has risen over the past month, a sign that the overheated labor market is returning to room temperature
The employment rate, a measure of how much of the population is working or looking for work, rose to 62.8 percent, eventually reaching a level in line with pre-pandemic numbers.
Signs of a cooling labor market should be welcomed by the Federal Reserve, which has been trying to curb inflation with a series of aggressive rate hikes.
The central bank wants hiring to slow as strong demand for workers tends to fuel rapid wage increases and fuel inflation.
The Fed hopes to achieve a rare “soft landing” in which it would succeed in slowing hiring and growth enough to cool price increases without plunging the world’s largest economy into recession.
Economists have long been skeptical about the success of Fed policymakers, but optimism has increased in recent months.
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