Unemployment at 4.2% in August, 20,000 fewer jobs created than expected

The Labor Department's Bureau of Labor Statistics (BLS) reported that unemployment stood at 4.2% in August. The figure suggests that the hiring pace has cooled (it stood at 4.3% in July). Overall, the nation added 142,000 jobs to the market, falling short of expectations (160,000 -165,000).

This report reflects the crisis under the Biden-Harris administration two months before the election, and again highlights the weakness of its economic policies, known as Bidenomics. It also shows how employment in the country continues to deteriorate at an alarming rate, which has sparked a new debate on the direction the Federal Reserve (Fed) should take to address this situation. The pressure is mounting for the Fed to consider a drastic cut in interest rates, with voices advocating a 50 basis point reduction at the next meeting.

Layoffs rise to 1.1%

Job openings declined to 7.67 million last month, marking their lowest point since January 2021. This number was below expectations of 8 million and was also lower than the 7.91 million recorded in June (a figure revised down from the initial 8.18 million).

In addition, the report revealed a 0.1-point increase in the layoff rate, reaching 1.1%. Meanwhile, the quitting rate also rose by 0.1 points to 2.1%. The ratio of job openings to the number of unemployed fell to 1.1, down from a high of 2 in 2022.

The increase in jobs was led by the creation of 44,000 positions in the health care and social services sectors, followed by 46,000 in leisure and hospitality, 34,000 in construction, and 24,000 in the public sector. On the other hand, the manufacturing sector suffered a loss of 24,000 jobs.