By Isaac Cohen*
After seven consecutive months of average monthly creation of 225,000 new jobs, in August there was a disappointing downward turn in the US labor market. Last week, the Labor Department said only 142,000 new jobs were created in August. Still, the unemployment rate fell to 6.1 percent, the lowest level since the 2008-2009 Great Recession, mainly due to less participation in the workforce, which at 62.8 percent was unseen since 1978.
By sectors, professional and commercial services were the most dynamic, with 43,000 new jobs created in health care. By contrast, job losses were registered in retail, while no new jobs were created in manufacturing.
Vigorous job creation, in the previous seven months, was generating the expectation that the central bank would start increasing interest rates sooner, from the current near zero level. However, the weaker August employment figures confirmed the conclusion presented by the Federal Reserve Chairwoman Janet Yellen, at a recently held conference on labor market dynamics. Chair Yellen recalled the Open Market Committee, last July, said “underutilization of labor market resources still remains significant.” Therefore, Federal Reserve Bank of Philadelphia President Eric Rosengren concluded, in a separate speech, monetary policy can “continue to be patient.”
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.