American employers hired fewer workers than forecast in August and the jobless rate dropped because people left the workforce, bolstering those on the Federal Reserve who want to be more deliberate in removing monetary stimulus.
The 142,000 advance in payrolls was smaller than the lowest estimate in a Bloomberg survey and followed a revised 212,000 gain in July, figures from the Labor Department showed today in Washington. The median estimate was for a 230,000 increase. The unemployment rate fell to 6.1 percent from 6.2 percent in July, reflecting a drop in joblessness among teenagers.
Estimates in the Bloomberg survey of 91 economists ranged from increases of 190,000 to 310,000 after a previously reported 209,000 July gain. The August advance interrupted six straight months of payroll gains exceeding 200,000. Revisions to prior reports subtracted a total of 28,000 jobs from overall payrolls in the previous two months.
The smaller-than-projected August increase reflected a decline in retail employment and little change at the nation’s manufacturers. The participation rate, which indicates the share of working-age people in the labor force, decreased 0.1 percentage point to 62.8 percent; the lowest since 1978. The number of Americans employed part-time because they couldn’t find full-time work dropped 234,000 in August. The employment report also showed average hourly earnings rose 0.2 percent to $24.53 in August from $24.47 the prior month. They were up 2.1 percent over the past 12 months.
The economy expanded at a 4.2 percent annualized pace in the second quarter following a first-quarter contraction of 2.1 percent while corporate profits climbed by the most in almost four years.