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US hiring slows in August

September 5, 2014

Hiring in the United States lost some of its momentum in the first half of the year, the latest statistical data have shown. This will be seen as a signal to the Federal Reserve to stick to its cautious policy.

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Sign saying 'Will work for food' (Photo: jamdesign)
Image: Fotolia/jamdesign

US employers hired only 142,000 people in August, the Labor Department reported Friday. That's way below the 225,000 penciled in for non-farm payrolls.

The August figure marked the lowest number in eight months, snapping a streak of hiring above 200,000 per month in the January to July period.

The unemployment rate fell one tenth of a percentage in August to 6.1 percent as people dropped out of the labor force.

What will the Fed make of it?

"Clearly, [the hiring figures] are disappointing, but the preponderance of evidence is that the economy is still gaining a lot of traction," said Russell T. Price, a senior economist at Ameriprise Financial.

The surprise slowdown in job growth in the US is at odds with household perceptions of the domestic labor market brightening significantly.

Investors responded to the figures positively as they hoped the interim weakness might delay the day when the Federal Reserve starts raising interest rates.

hg/sgb (Reuters, AP)