The economy Situation on the US labor market continues to cool down

In the USA, the situation on the labor market has continued to weaken. According to the US Department of Labor, the US economy created fewer jobs than expected in August.

The increase in employment in the two previous months was also revised sharply downwards. Meanwhile, the unemployment rate fell slightly, as expected, after reaching its highest level since October 2021 in July. Meanwhile, hourly wages rose slightly more than economists had forecast.

Fewer new jobs

The number of new jobs rose to 142,000 in August, according to the ministry in Washington. However, the number of new jobs for the two previous months was revised significantly downwards, by 86,000. In addition, analysts had on average expected stronger job growth of 165,000 in August.

"The previous month's figure was revised downwards. A downward trend is therefore unmistakable," said chief economist Thomas Gitzel from VP Bank. The report gives the Fed "free rein to ease monetary policy".

According to the ministry, the unemployment rate fell slightly by 0.1 percentage points to 4.2% in August. However, it is only just below the highest rate since October 2021, which was reached in July at 4.3%.

Stronger wage development

Wage growth was somewhat stronger. In a monthly comparison, wages rose by 0.4% in August, after increasing by just 0.2% in the previous month. In a year-on-year comparison, hourly wages rose by 3.8%.

The wage trend has an impact on general inflation. Most recently, the inflation rate in the USA fell to 2.9% in July. It is therefore approaching the Fed's target of two percent again.