The U.S. economy reported an increase of 142,000 new jobs in August, falling short of the anticipated 160,000 jobs.
Despite the modest job creation, the unemployment rate remained virtually unchanged at 4.2%, compared to the previous month’s rate of 4.3%.
Average hourly earnings saw an unexpected rise of 0.40% month-over-month, with gains observed across various sectors.
The number of hours worked per week rebounded to an average of 34.3, aligning with the levels recorded from April to June.
Analysts from Citi have expressed concerns regarding the latest jobs report. They highlighted that the below-consensus figure of 142,000 new jobs, coupled with the downward revisions for previous months and an almost static unemployment rate, did not meet expectations for a recovery from the July slowdown.
“The figures line up with other signals that the job market is continuing to soften, a classic sign that the US economy is headed into a recession,” Citi economists said in a note.
“The report is not definitive for the size of the September rate cut – our base case is for 50bp.
“[W]e are increasingly convinced the Fed will deliver multiple larger-sized cuts as the job market continues to cool.”
