Job growth picked up in August from the sluggish pace of hiring the previous month, providing a bit of relief after sharp declines earlier in the summer roiled financial markets and threatened to disrupt the momentum Vice President Kamala Harris and her campaign had built up.
The government said Friday that the American economy added 142,000 jobs last month — slightly below analysts’ expectations but a marked improvement from the downwardly revised growth of 89,000 in July.
The unemployment rate edged down in August to 4.2% from 4.3% the previous month, but it is up from 3.7% at the start of the year.
The new report seems certain to set in concrete the Federal Reserve’s earlier indication that it will begin lowering interest rates by a quarter point later this month after aggressively raising them in 2022 and last year to curb inflation.
August job numbers for individual states won’t be available for another two weeks, but the national data suggest that California may continue to trail the country in job growth.
Nationally, motion pictures and the broader information sector lost some jobs, and employment in other sectors important to California, such as business services and transportation and warehousing, was flat last month. California’s most recent jobless rate, for July, was 5.2%, the second highest in the land after Nevada.
Politically, the latest report may come as a welcome relief to Harris’ campaign. Although most voters typically make up their minds by summer of election year, July’s employment numbers and shrinking job openings, coupled with volatile stock markets, increased worries of a recession. A bad August report would have given former President Trump more talking points as they head to the final weeks before the election, including the debate next week.
Although the economy and job market have recovered nicely since coming out of the pandemic, the Biden administration’s public standing has been badly hurt by still-high consumer prices that hit a four-decade-high inflation rate of 9.1% in June 2022.
Inflation has come down sharply since then, to below 3%, but prices overall are still about 20% higher than before the pandemic — and that continues to weigh on consumers’ perception of the economy.
August job growth was slightly below the 160,000 number that economists, on average, were expecting. Analysts were looking for a rebound from July’s weak performance, which was held down by temporary layoffs and the effects from Hurricane Beryl and wildfires in California.