US job growth slowed more than expected in August after two straight months of hefty increases, but the pace of gains should be more than enough for the Federal Reserve to announce a plan to start trimming a massive bond portfolio accumulated as it sought to bolster the economy, according to Reuters.
Persistently sluggish wage growth could, however, make the US central bank cautious about raising interest rates again this year.
The labour Department said on Friday nonfarm payrolls increased by 156,000 last month. The economy created 399,000 jobs in June and July.
“We see nothing here that prevents the Fed from initiating its balance-sheet reduction plan at the September meeting,” said John Ryding, chief economist at RDQ Economics in New York.
Average hourly earnings rose three cents or 0.1 per cent after advancing 0.3 per cent in July, keeping the year-on-year gain in wages at 2.5 per cent for a fifth consecutive month.
The average workweek slipped to 34.4 hours from 34.5 hours in July. US stocks were trading higher, with the Dow hitting the 22,000 mark for the first time in more than two weeks.
The dollar was little changed against a basket of currencies, while prices for US Treasuries fell.
August’s moderation in employment growth, which pushed payroll gains below the 176,000 monthly average for this year likely reflects a seasonal quirk.
Over the past several years, the initial August job count has tended to exhibit a weak bias, with revisions subsequently showing strength.