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Manufacturing is One Bright Spot as US Payrolls Miss Forecast

Sept. 1, 2017
Manufacturing payroll gains matched the highest in five years.

The U.S. economy added fewer employees than expected in August, the jobless rate rose and wages rose less than forecast, in a break from otherwise solid progress in the labor market.

Nonfarm payrolls rose by 156,000, below the median estimate of 180,000 in a Bloomberg survey of economists, and revisions for the prior two months subtracted 41,000 jobs, according to Labor Department data on Friday. The unemployment rate rose to 4.4% from 4.3%.

Average hourly earnings rose 0.1% from the prior month, below the median projection for a 0.2% gain, and the annual rate of 2.5% was also less than expected. July wages were unrevised at a 0.3% monthly increase.

One bright spot was manufacturing, where payroll gains of 36,000 matched the highest in five years.

“This was a softer report, but it doesn’t change the overall picture, which is the economy and the labor market are in good shape,” said  Gus Faucher, chief economist at PNC Financial Services Group Inc. in Pittsburgh. “August tends to be a little bit softer, so we can certainly see an upwards revision over the next couple of months,” and wage growth will accelerate as the labor market tightens, he said.

By Patricia Laya

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