Washington: The US economy generated a lower-than-expected 173,000 new jobs in August, the government reported Friday, but upward revisions to previous months` data sweetened the picture for hiring across the country.
The overall unemployment rate fell to 5.1 percent from 5.3 percent in July, hitting the lowest level since April 2008 as the country plunged into recession, the Labor Department said.
The drop in the jobless rate was helped by the department revising the job creation numbers for June and July up by a total of 44,000 positions, which took the monthly average for the June-August period to a healthy 221,000 jobs a month.
But the data also included a 261,000 rise in the number of people who have dropped out of the labor force completely.
Wage gains -- an important indicator for inflation -- remained muted, rising eight cents an hour to USD 25.09 from July, up 2.2 percent from a year ago.
Underpinning that relative weakness was a 158,000 surge, to 6.48 million, in the number of people working part time because they cannot find full-time positions.
Government hiring picked up in the month, to 33,000 new positions, but the strongest gains remained in the healthcare sector, with 56,400 jobs. The mining and manufacturing sectors both saw declines.
Despite the fall in the unemployment rate, the overall workforce participation rate remained low at 62.6 percent, suggesting that the jobs market and wages are not strong enough to pull dropouts back to the workforce. In April 2008, the rate was 65.9 percent.
Analysts, who on average had expected 217,000 net new jobs, downplayed the slowdown, noting that August figures are more volatile and given to large revisions than any other month, in part because the country is transitioning in that time from summer vacation to a new school year.
Ian Shepherdson of Pantheon Macroeconomics said that for the past six years the August figure has been revised upward by an average of 66,000 each time.
Nevertheless, the report was likely not strong enough to convince the Federal Reserve to begin raising interest rates at its September 16-17 policy meeting, several economists said.
"Dig deeper and the labor market report should in fact add to rate-rise odds, but recent financial market volatility and growth jitters in China mean it would be seen by many to be a risky move to start hiking rates any time soon," said Chris Williamson at Markit.
