August Jobs Report Strengthens Case for US Fed Rate Hike
The US labour market showed resilience in August, defying expectations of a sharp deterioration. The US Federal Reserve may still face a tough decision on interest rates at its September meeting.
New Delhi: A stronger-than-expected August jobs report has eased concerns over the labour market's strength, but signs of underlying softness could keep the door open for policy easing later, according to ICICI Bank Research. The US non-farm payrolls increased by 162,000 in August, exceeding expectations of 55,000.
The previous two months were revised upwards by a combined 55,000, taking the three-month average to 71,000. The unemployment rate remained unchanged at 4.1 per cent, while the labour force participation rate improved to 61.6 per cent from 61.4 per cent.
ICICI Bank Research noted that hiring was relatively broad-based, with employment gains in food services and drinking places, construction, manufacturing, healthcare and education. The private payroll diffusion index rose to 55.6 from 52.8, suggesting an improvement in the breadth of job creation.