US Job Creation Numbers Weaker Than Predicted

Stock futures rose after a weak US jobs report showed the economy created just 142,000 net new jobs in August.

The figure came in well below expectations but was seen by investors as making it less likely that the Federal Reserve would soon start considering the possibility of interest rate increases.

The US Labor Department report showed that more Americans gave up looking for work during the month – a key factor behind the jobless rate falling from 6.2% in July to 6.1%.

The job increase of 142,000 was the smallest rise in eight months, the report said, while there was renewed concern for the manufacturing sector which recorded no job growth at all.

Retail payrolls declined for the first time since February though construction employment rose for the eighth-straight month and Government hires rose by 8,000.

Service sector job growth was behind the bulk of the increase.

Average hourly earnings rose 6 cents in August – up 2.1% from a year ago.

Sluggish wage growth, large numbers of part-time workers and high long-term unemployment are core concerns for Fed Chairman Janet Yellen.

The central bank has pointed to these metrics as evidence of “significant underutilization” of labor market resources that merits a stimulative monetary policy.

The next Fed policy meeting is likely to see August’s report as supporting that view.

The Fed has kept benchmark lending rates near zero since December 2008 and financial markets do not foresee an increase until around the middle of next year at the earliest.

The payroll numbers lifted major stock futures, including the Nasdaq higher, while European stocks trimmed losses.

US Job Creation Numbers Weaker Than Predicted