The economy added 142,000 jobs in August, substantially missing analyst expectations, according to the latest data from the Bureau of Labor Statistics. Economists had predicted another month of high employment gains, with estimates predicting that 225,000 positions would be added. Instead, the August hiring missed that number by almost 40% and signalled the lowest employment growth in eight months. Unemployment remained virtually static at 6.1%.
The report also showed the number of long-term unemployed persons declined by 192,000 to 3 million in August. This group currently makes up about a third of the overall unemployed population, but has declined by 1.3 million over the past year. The labor force participation rate — the percentage of workforce that is either employed or actively looking for work — remained mostly unchanged at 62.8%.
Friday’s numbers were a surprise considering recent economic growth.
One important question is how the Federal Reserve will interpret the report. As Money’s Taylor Tepper reports, Fed chair Janet Yellen has made stronger employment growth a core part of her monetary policy, and has signaled the Fed will raise interest rates only when slack in the labor market decreases. Slow job growth may convince the central bank to hold back on rate increases even longer and wait for further employment gains.