Unemployment rate surges in latest jobs report, defying economists’ predictions.
Unemployment Rate Spikes in New Jobs Report, Defying Economist’s Expectations
The U.S. added 187,000 non-farm payroll jobs in August as the unemployment rate shot up to 3.8%, according to Bureau of Labor Statistics data released Friday.
Economists had anticipated the country would add 170,000 jobs in August compared to 187,000 jobs in July, and that unemployment would remain unchanged at 3.5%, according to Reuters.
The U.S. economy grew less than previously thought in the second quarter of 2023, with yearly real Gross Domestic Product being revised down from 2.4% to 2.1%.
“An increasing number of surveys show firms are reducing hiring, removing unfilled job postings, and eliminating positions after separations (quits or firings),” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the Daily Caller News Foundation.
“With the big drop in the most recent month’s job openings and the downward revisions, it’s now clear that we’re below the pre-pandemic trend,” he said. “While the labor market is a lagging indicator, it’s clear that this is yet another sign of an economic slowdown.”
Always a pleasure joining @EveningEdit w/ @LizMacDonaldFOX on @FoxBusiness, this time discussing the latest economic numbers and how inflation has effectively doubled what the average American pays in federal income taxes: pic.twitter.com/tVMLFkbr8t
— EJ Antoni (@RealEJAntoni) August 31, 2023
The BLS release is in line with data from the private payroll firm ADP that showed only 177,000 private jobs were added in August.
The ADP data for previous months has well exceeded what the BLS estimated in its jobs estimates, with the ADP reporting that 324,000 and 497,000 new private jobs were added for the months of July and June, respectively.
Jerome Powell, chair of the Federal Reserve, noted at the Jackson Hole Economic Symposium that factors like a hot labor market, high inflation and sustained economic growth would increase the likelihood of another interest rate hike.
The federal funds rate has been raised eleven times since March 2022 by the Fed, bringing the rate within a range of 5.25% and 5.50% in an effort to bring down inflation.
Inflation remained elevated in July, increasing by 3.2% for the year, up from 3.0% in June but down from a high of 9.1% in June 2022.
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