WASHINGTON, Sept 1 - U.S. job growth picked up in August, but the unemployment rate jumped to 3.8% and wage gains moderated, suggesting that labor market conditions were easing and cementing expectations that the Federal Reserve will not raise interest rates this month.
The labor market is slowing in response to the U.S. central bank's hefty rate hikes to cool demand in the economy.Nonfarm payrolls increased by 187,000 jobs last month. That was sharply down from the monthly average gain of 271,000 over the past 12 months. A tendency for the initial payrolls count to be weaker in August before being subsequently revised higher in September and October also factored into economists' expectations.
The transportation and warehousing sector shed 34,000 jobs, reflecting the Yellow trucking bankruptcy. There were also job losses in the information sector, in part reflecting the Hollywood strike. PARTICIPATION RATE RISES Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25%-5.50% range. Financial markets are now betting the central bank is done raising rates and may start cutting them next year, according to CME Group's FedWatch Tool. Futures tied to the Fed's policy rate show only a slight chance of a rate hike at the Sept. 19-20 meeting.