US adds just 169,000 jobs in August, missing expectations

Labor Department report could keep Federal Reserve from scaling back stimulus later this month

A job-seeker completes an application at a career fair in Philadelphia in this file photo taken July 25, 2013.
Mark Makela/ Reuters

Job growth in the United States was lower than expected in August, with just 169,000 jobs added, according to the Labor Department. The number fell short of expected gains of 180,000 new jobs.

The unemployment rate dropped to 7.3 percent, its lowest point in nearly five years, as more people gave up the search for work, leaving them out of the count of the number of unemployed workers. The findings could delay the Federal Reserve's plan to scale back its massive monetary stimulus later this month.

The share of Americans working or looking for work fell to its lowest level in 35 years. Hiring has slowed from the start of the year.

Stocks initially jumped after the government announced the lower unemployment figures, but fell again in early-morning trading. The Dow Jones industrial average dropped 128 points, and broader indexes also declined.

July's job gains were just 104,000, the fewest in more than a year and down from the previous estimate of 162,000. June's figure was also revised down to 172,000, from 188,000. The revisions lowered total hiring over those two months by 74,000.

The employment report suggested the economy was struggling to regain momentum after stumbling early in the third quarter.

Consumer spending, home building, new home sales, durable goods orders and industrial production all weakened in July.

The report suggests that even employed Americans are still struggling, a trend which could influence the Fed to stave off attempts to scale back the stimulus. Most of the hiring in August was in lower-paying industries -- such as retail, restaurants and bars, continuing a trend that began earlier this year, and even amid recent protests by low-wage workers for better pay and working conditions. Retailers added 44,000 jobs and hotels, restaurants and bars added 27,000. Temp hiring rose by 13,000.

Manufacturers added 14,000, the first gain after five months of declines. Construction jobs were unchanged in August.

Auto manufacturers boosted hiring in August. Some of the jobs were workers who were rehired last month after being temporarily laid off in July, when factories switched to new models.

Americans are buying more cars than at any time since the recession began in December 2007. And U.S. factories expanded in August at their fastest pace in more than two years.

Average hourly earnings rose five cents.

The length of the workweek rose back to an average of 34.5 hours from a six-month low of 34.4 hours in July.

Al Jazeera and wire services

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