WASHINGTON – In August 34,000 fewer jobs were added to the U.S. economy than in the previous month and the national unemployment rate remained unchanged, according to a government report released on Friday.
According to the U.S. Bureau of Labor Statistics, 130,000 jobs were added to the economy last month, compared with 164,000 in July. The unemployment rate since June is 3.7%.
Analysts had predicted that about 160,000 jobs would be added in August.
The report comes just days after China imposed $75 billion worth on tariffs on U.S. goods. The tariffs are the latest escalation in a trade war between the two nations that began last year. The U.S. and China are engaged in talks to forge a new trade agreement.
A brief market scare occurred on Aug. 14 after the Dow Jones Industrial Average (DJIA) dropped 800 points and the bond market signaled its first recession warning since 2007 — the year before the Great Recession devastated world financial markets. However, markets have since recovered and the Dow is now approaching 27,000.
The Federal Reserve Board’s Federal Open Market Committee (FOMC) is scheduled to hold its next meeting Sep. 17-18. The central bank is expected to cut interest rates by a quarter of a point. The Fed cut rates by that margin at its July meeting. The cut was the first since 2008. It placed the target range at 2.00% to 2.50%.
TMN asked analysts to assess the impact of the jobs report.
“I think that the Fed’s hand is going to be forced for another rate cut,” said Robert Johnson, a professor of finance at Creighton University’s Heider College of Business in Omaha, Neb.
He added: “I think that that’s been baked in. But, if there was any doubt, I believe these numbers point to the fact that the Fed will cut rates again.”
Johnson predicted that the Fed will cut rates by “at least a quarter of a point” but said he does not believe the central bank will go so far as to cut rates by half a point.
Peter Morici, a professor of business at the University of Maryland’s Robert H. Smith School of Business, also predicted that the Fed will lower interest rates.
“The Fed will likely cut rates now. It’s almost certain.”
Morici added: “I don’t know how much good that will do.”
He said the economy is “slowing significantly and is in need of additional stimulus.”
Morici said legislative action is necessary but is unlikely to commence because Democrats in Congress are unlikely to cooperate with the Trump administration.