WASHINGTON (Reuters) – U.S. job growth slowed less than expected in August but the jobless rate rose and wage growth moderated, official statistics showed on Friday, which could ease pressure on the Federal Reserve for another three-quarter point rate hike this month.
The Labor Department reported 315,000 non-farm payrolls last month and revised the July figure down slightly to 526,000 from 528,000 originally reported.
This is the 20th consecutive month of employment growth.
Economists polled by Reuters, however, predicted on average a slightly larger slowdown, to 300,000 job creations in August, their estimates ranging from 75,000 to 450,000.
The unemployment rate rose to 3.7% while the Reuters consensus gave it at 3.5% as a month earlier.
The report, very followed on the markets, also shows that wage growth slowed to 0.3%, after +0.5% the previous month, and its increase over one year remains at 5.2%.
After the publication of these figures, the dollar accentuated its decline against a basket of reference currencies while futures contracts on Wall Street indices and European stock markets amplified their rise.
“The fundamental message is that the labor market may start to calm down and the Fed may not have to act so aggressively,” said David Page, head of macroeconomic research at AXA Investment Managers.
Fed Chairman Jerome Powell warned last week that a painful period of weak growth and possible rising unemployment is looming as the US central bank continues to tighten monetary policy to control inflation.
The central bank raised its main policy rate by 75 basis points in June and July. According to the CME’s FedWatch Barometer, markets are pricing a roughly 60% chance of a similarly large hike at the Sept. 20-21 meeting, up from 75% the day before.
Data on consumer prices in August, which will be released on September 13, will also be a determining factor in the decision-making of officials at the institution.
(Report Lucia Mutikani, French version Laetitia Volga, edited by Marc Angrand and Sophie Louet)