The U.S. economy added 187,000 jobs in August – in line with expectations – but America’s unemployment rate also increased sharply to 3.8 percent in numbers released Friday.
Health care, leisure and hospitality, social assistance, and construction grew, but transportation and warehousing declined. The recent labor market headwinds, such as the Hollywood actor and writers strikes that dropped workers from payrolls – and the July bankruptcy of trucking company Yellow – have partially contributed to the high unemployment rate. The unemployment has rate reached its highest level since early 2022.
Some experts believe that these current labor market conditions suggest a return to pre-pandemic conditions and could lead the Federal Reserve to pause hikes or even cut interest rates in the first half of next year. However, Rubeela Farooqi, chief U.S. economist for High Frequency Economics, claims there is an upside risk to inflation, and that another increase in rates later this year cannot be ruled out.
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