(The Hill) – The United States added 142,000 new jobs in August and the unemployment rate fell to 4.2 percent, according to data released Friday by the U.S. Labor Department.
The new report is in line with economists’ predictions of 161,000 job losses and an unemployment rate of 4.2 percent. It will be closely watched as the Federal Reserve prepares to cut interest rates by at least a quarter of a percentage point amid concerns that the agency is falling behind on its cuts as hiring and employment growth sluggish.
After interest rates were held at a 23-year high of 5.25 to 5.5 percent since last JulyFed Chairman Jerome Powell explained “It’s time for a policy adjustment,” he said in a speech last month at the annual economic policy conference in Jackson Hole, Wyoming.
Powell pointed to the deteriorating labor market situation, saying the “labor market has cooled significantly from its previously overheated state.”
After devastating job losses in March and April 2020 at the start of the pandemic, the labor market was at full steam as the economy reopened and employers began to fill positions, reaching a record high of 939,000 additional jobs in July 2021.
Hiring has slowed significantly since the post-pandemic recovery. come into harmony with the pre-pandemic hiring rate, even after a massive downward revision last month.
The unemployment rate also rose slightly last year, from a historic low of less than four percent to 4.3 percent in July, almost a full percentage point above last year’s low of 3.4 percent, Powell noted in his speech in Jackson Hole, adding that it was “still low by historical standards.”
The September meeting of the Federal Open Market Committee is the last before the 2024 general elections on November 5.
The handling of tariffs by the politically independent agency is increasingly politicized.
Some Democrats urged Powell and the committee to cut interest rates because of their impact on housing affordability and the labor market. Former President Donald Trump, in turn, suggested in February that Powell might cut rates before the election to lend a hand Democrats in the upcoming election.
Powell, a lifelong Republican who was appointed by Trump in 2017 and reappointed by President Joe Biden in 2021, has made it clear that the Fed will tune out the political noise and base its decision on economic data.
