Business

US employment rises again in August

Stall vendor in the US Image copyright Getty Images

The expanding US economy added another 151,000 jobs in August, according to the US Labor Department, while the unemployment rate stayed at 4.9%.

The number of extra jobs was sharply down from an upwardly revised July figure of 275,000.

It was also a smaller rise than the average monthly increase of 204,000 seen during the previous 12 months.

Economists now think the chances of the US central bank raising interest rates this month have been reduced.

The official data for the country's "non-farm payrolls" shows that the number of people out of work was unchanged at 7.8 million in August.

The US economy has been expanding steadily since the end of the last recession in 2009.

Many US economists had expected a larger rise in the number of new jobs being created, more in line with the 190,000 jobs per month added during the previous three months.

But despite the apparent slowdown in August, the continued expansion of employment in the US still points to the possibility that the central bank, the Federal Reserve, could raise interest rates later in the year, most probably in December.

Last week Janet Yellen, the chairwoman of the Federal Reserve, said the country's economic growth and a stronger jobs market meant "the case for an increase in the federal funds rate has strengthened in recent months".

December rate rise?

Chris Williamson, chief economist at the financial data service Markit, said: "The data-dependent Fed will most likely see the payroll numbers as taking pressure off any immediate need to hike interest rates, significantly reducing the scope for further policy action in September."

"However, with survey data suggesting some of the recent slowdown in hiring and business activity is due to uncertainty ahead of the presidential election, a rate rise later in the year, most likely December, remains on the table providing the economic data flow picks up again in the fourth quarter."

This view was supported by Luke Bartholomew at Aberdeen Asset Management.

"This should cool speculation about a September hike," he said.

"December is once again shaping up to be the mostly likely date of the next [rate] hike."

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