August US Jobs Report: Payroll Employment Rises, Unemployment Falls

The United States economy didn't add as many jobs as was expected in August. The federal government said Friday that there were 142,000 non-farm payroll jobs added. The expectation was 161,000.

Unemployment did drop slightly, as expected, to 4.2% from 4.3%. Job gains occurred in construction and health care, according to the U.S. Bureau of Labor Statistics.

The number of unemployed workers in the U.S. stood at 7.1 million according to the new report, little changed over the previous month but higher than a year ago when there were an estimated 6.3 million workers without jobs.

The number of long-term unemployed (those jobless for 27 weeks or more) was virtually unchanged at 1.5 million in August. The long-term unemployed accounted for 21.3 percent of all unemployed people.

In August, average hourly earnings for all employees on private nonfarm payrolls increased by 14 cents, or 0.4 percent, to $35.21. Over the past 12 months, average hourly earnings have increased by 3.8 percent.

The report revised some employment numbers down for prior reports.

The change in total nonfarm payroll employment for June was revised down by 61,000, from +179,000 to +118,000 and the change for July was revised down by 25,000, from +114,000 to +89,000.

With these revisions, employment in June and July combined is 86,000 lower than previously reported.

Investors look at the job report to gauge the health of the labor market.

The Fed is expected to cut interest rates later this month. A 25 basis point cut is expected but there is also a possibility of a 50 basis point cut.