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US job growth slows, unemployment rate drops to 7.3%


US job growth slows, unemployment rate drops to 7.3%


There was disappointing jobs news for August from the US, which could delay the Federal Reserve scaling back its massive stimulus programme.

Employers hired 169,000 workers last month, against a 180,000 forecast. In addition the June and July payroll numbers were revised down showing 74,000 fewer jobs added in that period than previously calculated

The unemployment rate dropped to its lowest in four and a half years – 7.3 percent of the workforce, from July’s 7.4 percent, but that was due to Americans giving up the search for work.

There were strong job gains in the retail sector, as well as leisure and hospitality, and factory employment, but the report suggested the US economy is struggling to regain momentum after stumbling early in the third quarter.

In July, consumer spending, home building, sales of new homes, orders for longer lasting goods and industrial production all weakened.

The jobs numbers will play into the timing for policymakers from the US central bank reducing their cash-printing stimulus programme.

They are due to meet on September 17 and 18 and have made clear that they would base their decision on the progress the labour market has made since they launched their third round of ‘quantitative easing’ a year ago.

When that started the jobless rate stood at 8.1 percent.

The Fed’s decision will, in turn, have a major effect on global financial markets, which have been propped up by that cash.

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