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US employers slowed pace of hiring in August, unemployment rate ticks up

Washington, United StatesEdited By: Chaheti Singh SisodiaUpdated: Sep 03, 2022, 01:17 AM IST
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Unemployment in US (Representative photo) Photograph:(Reuters)

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"More great news: Our jobs market remains strong. Even more Americans are coming back to work," Biden tweeted.

According to government data released on Friday, American employers reduced their hiring pace in August following the unexpected increase in the previous month, and the unemployment rate edged up. This could provide some comfort to the central bank that its efforts to fight inflation are bearing fruit. 

The Federal Reserve is closely monitoring the development of the hot labour market and seeking for indications of softening as it attempts to cool the economy by sharply raising interest rates to curb inflation, which has risen to a 40-year high. 

The unemployment rate increased as more people entered the job field, despite the data showing earnings continuing to climb; this is a favourable trend that would allow the Fed to choose a lesser move later this month after two straight increases.

The most recent report was praised by President Joe Biden, who has been riding a tide of legislative and economic successes. 

"More great news: Our jobs market remains strong. Even more Americans are coming back to work," Biden tweeted.

According to the Labor Department's closely-watched monthly report, despite the decreasing pace, the job increases have raised employment above the level prior to the pandemic. 

According to the study, the US economy added 315,000 jobs in August, which was in line with expectations after hiring 526,000 people in July.

According to the figures, the jobless rate increased once again to 3.7 percent from 3.5 percent in the previous month. The rate of people who are in the labour force increased by three tenths to 62.4 percent. 

Although at a slower rate than in recent months, average hourly earnings increased by another 10 cents, or 0.3 percent, to $32.36 in August. Worker salary has climbed by 5.2 percent in the last year. 

The Fed is concerned about continued rising pressure because it thinks it may result in a spiralling wage-price relationship and higher inflation.

(with inputs from agencies)