The U.S. economy continued adding more jobs in August but at a slightly slower pace, leading to expectations the Federal Reserve will punt on a possible interest rate hike later this month. A separate report shows factor orders rebounded in the biggest gain in nine months.
The Labor Department reported on Friday morning that 151,000 non-farm jobs were added. That's less than the 180,000 Wall Street was expecting, but it includes an additional 3,400 payroll positions in the for-hire trucking sector.
The overall figure compares to an average of 181,000 monthly jobs additions so far in 2016 and an average of 204,000 over the past 12 months. August also marks the 78th consecutive month of job growth.
The nation's unemployment rate remained at 4.9% for the third straight month.
There were 14,900 jobs gains in the transportation and warehousing sector in August, which includes the trucking figure. Other significant job additions were recorded in the food service, social assistance, professional/technical and financial industry sectors.
The department also revised job growth numbers for June and July, but that resulted in only 1,000 fewer net jobs than it reported earlier.
The slowing in August employment growth was not unexpected given the outsized gains recorded over the previous two months. The pace of job creation is still sufficient to sustain overall economic growth, according to RBC Economics Assistant Chief Economist Paul Ferley.
“Recent expenditure data, including the July trade numbers reported this morning [showing the U.S. trade deficit falling to $39.5 billion in July from $44.7 billion in June due to a 1.9% hike in exports], are pointing to third quarter gross domestic product (GDP) growth of 3.2%,” he said – far better than the anemic 1.1% rate in the second quarter.
“Indications of sustained above-potential growth and tightening labor markets are expected to eventually return the Federal Reserve to tightening
