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Writer's pictureBy The Financial District

Unemployment Falls, Hints At Orderly U.S. Labor-Market Slowdown

US employment increased less than expected in August, but a drop in the jobless rate to 4.2% suggested that an orderly labor market slowdown continued and probably did not warrant a big interest rate cut from the Federal Reserve this month, Lucia Mutikani reported for Reuters.


The below-expectations rise in nonfarm payrolls reported by the Labor Department on Friday likely reflected a seasonal quirk that tends to push the initial August print lower.



The below-expectations rise in nonfarm payrolls reported by the Labor Department on Friday likely reflected a seasonal quirk that tends to push the initial August print lower.


Nonetheless, labor market momentum is slowing, with the closely watched employment report also showing that the economy added 86,000 fewer jobs in June and July than previously reported.



"The labor market is cooling at a measured pace," said Jeffrey Roach, chief economist at LPL Financial.


"Businesses are still adding to payrolls, but not as indiscriminately. The Fed will likely cut by 25 basis points and reserve the right to be more aggressive in the last two meetings of the year."



Nonfarm payrolls increased by 142,000 jobs last month after a downwardly revised 89,000 rise in July, the Labor Department's Bureau of Labor Statistics said. Economists polled by Reuters had forecast payrolls increasing by 160,000 jobs after a previously reported 114,000 gain in July. Estimates ranged from 100,000 to 245,000 jobs.




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