U.S. Employment Growth Slows in August Amid Lower Jobless Rate

U.S. employment grew by 142,000 jobs in August, less than predicted, but the jobless rate dropped to 4.2%, indicating a steady labor market. This development is unlikely to necessitate a major interest rate reduction by the Federal Reserve. Wages grew 0.4% monthly and 3.8% annually, supporting consumer spending.

U.S. employment saw a less-than-expected increase in August, adding 142,000 jobs, while the unemployment rate fell to 4.2%, suggesting a continued orderly slowdown in the labor market. Despite the modest job gains, experts believe the data does not warrant significant interest rate cuts from the Federal Reserve this month.

The Labor Department's Bureau of Labor Statistics reported a revised increase of 89,000 jobs in July, down from the initially reported 114,000. Economists had predicted an August increase of 160,000 jobs. Seasonal variations, particularly the different start dates for the school year across the country, have influenced the initial payroll counts.

Layoff levels remain historically low, with the unemployment rate dropping after four months of increases. Financial markets are divided on the probability of a rate cut at the Fed's upcoming policy meeting. Meanwhile, average hourly earnings grew by 0.4% in August and 3.8% year-on-year, underpinning the economy through robust consumer spending.

(With inputs from agencies.)