Employment growth in the United States slows more than expected in August

Employment growth in the United States slowed more than expected in August, with hirings in the retail trade declining for a seventh consecutive month, but strong wage increases are expected to support consumer spending and maintain the growth of the economy moderately in the face of growing threats from trade tensions.

The Labor Department's monthly employment report released on Friday also showed a rebound in the work week as manufacturers increased the number of hours worked by workers after slashing them in July. The weakening of the economy, highlighted by the reversal of the yield curve of the US Treasury, was largely blamed on the one-year trade war between the White House and China.

Washington and Beijing hit each other on Sunday. While the two economic giants decided Thursday to hold high-level talks in early October in Washington, the uncertainty that has eroded business confidence persists.

The economy is also facing difficulties stemming from Britain's potentially uncoordinated exit from the European Union and slowing growth in China and the rest of the world.

The Federal Reserve is expected to further reduce interest rates this month to maintain the longest economic expansion in its history, now in its eleventh year, on schedule. The US central bank cut borrowing costs in July for the first time since 2008.

Non-farm payrolls increased 130,000 jobs last month, the government said. The economy created 20,000 fewer jobs in June and July than previously forecast. Economists polled by Reuters forecast an increase of 158,000 jobs in August.

A seasonal quirk could explain the increase in employment less than expected last month. In recent years, the initial number of jobs in August has tended to have a low bias, with revisions eventually showing strength.

However, the slowdown in employment growth also reflects the sharp declines in employment measures taken by the Institute for Supply Management in the manufacturing and services sectors in August. In addition, Challenger, Gray & Christmas, a global hiring company, announced a 37.7% increase in job cuts expected by US employers in August.

Employment gains averaged 156,000 over the last three months, but still exceed the 100,000 or so jobs per month needed to keep pace with the growth of the working-age population. The unemployment rate remained unchanged at 3.7% for a third consecutive month as more people entered the labor market.

Although the commercial stalemate does not seem to spill over into the job market, job growth has been slowing since mid-2018.

Last month, the government estimated that the economy created 501,000 fewer jobs in twelve months until March 2019 than previously announced, the largest downward revision of the economy. level of employment in ten years. This suggests that employment growth during this period averaged 170,000 per month instead of 210,000. The revised payroll data will be released next February.

The government has also limited economic growth for the second quarter. The employment report shows that average hourly earnings rose 0.4% last month, the largest increase since February, after rising 0.3% in July. But the annual rise in wages went from 3.3% in July to 3.2%, the rise of last year having been removed from the calculation. Strong consumer spending supports the economy.

The work week rebounded after reaching its lowest level in almost two years in July. The average work week went from 34.3 hours in July to 34.4 hours in August. The measure of hours worked, which is an approximation of gross domestic product, rose 0.4% after a drop of 0.2% in July.

Employment in the manufacturing sector rose by 3,000 warm jobs last month, after rising 4,000 in July. The report released Tuesday by ISM signaled this weakness, indicating that its measure of employment in factories had dropped in August to its lowest level since March 2016.

The manufacturing sector ironically bore the brunt of the Trump administration's trade war, which, according to the White House, was aimed at boosting the sector. The manufacturing work week increased from 0.2 hours to 40.6 hours.

The wage bill in construction increased by 14,000 jobs after losing 2,000 in July. Retail employment fell by 11,100 jobs, prolonging the decline that began in February.

Government jobs jumped 34,000 jobs, boosted by temporary hires for the decennial census in 2020.