U.S. labor market stronger than expected in August, unemployment rate stable

The U.S. labor market was stable in August. (AFP)

[Compiled by Wei Guojin/Taipei Report] The U.S. Department of Labor announced on the 4th that 162,000 new non-farm jobs were added in August, which was much higher than the revised 21,000 new jobs in July and the 53,000 analysts expected. It was the highest number of new jobs in a month since March. The unemployment rate remained at 4.1%, in line with expectations.

The Federal Reserve (Fed) has repeatedly stated that the labor market is stable. This report is consistent with this view and may turn the Fed's attention to the inflation data released next Friday. The August Consumer Price Index (CPI) will be the last important data before the Fed's policy meeting on September 15 and 16. Federal Reserve Board Governor Waller said on the 3rd that "based on good economic activity and labor market conditions, they are not important factors in my decision on monetary policy."

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Regarding labor market conditions, policymakers usually focus more on the unemployment rate, which actually fell by 0.5 percentage points in August from the same period last year. Another unemployment indicator, which includes discouraged workers who have stopped looking for a suitable job and those who work part-time jobs due to economic factors, fell to 7.7%, the lowest level since July last year.

In addition to the solid number of new jobs in August, the number of jobs in previous months has also been revised upwards. In July, 21,000 new jobs were added, turning into a positive figure from the previously reported loss of 23,000 people. In June, the number was revised up from 11,000 to 31,000. Different from previous months, employment growth occurred in a wide range of industries in August.

Average hourly earnings increased by 3.1% year-on-year in August, indicating that wage growth continues to fail to keep pace with inflation. The CPI increased by 3.4% year-on-year in July. High gasoline prices continue to put pressure on consumer budgets, with regular gasoline prices nationwide averaging $4.07 per gallon in August, compared with $3.95 in July.

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