Unemployment Jumps to 3.8% in August, 187,000 Jobs Added

Employers in the United States added 187,000 workers to their payrolls in August, the Department of Labor said Friday.

The unemployment rate jumped to 3.8 percent.

In the preliminary report for July, the Labor Department said that the economy added 187,000 jobs and the unemployment rate fell to 3.5 percent. On Friday, the government revised this down to show the economy added just 157,000. The June report was revised down by 80,000 to 105,000. Over the prior 12 months, employment has grown an average of 271,000 per month.

Economists had forecast the economy would add around 170,000 jobs, with the range of forecasts in the Econoday survey running from 40,000 to 190,000. The wide range suggests a lot of uncertainty about the strength of the labor market.

The labor force participation rate rose 0.2 percentage points to 62.8 percent in August, the first increase in several months.

The average workweek increased by one-tenth of an hour to 34.4 hours. In manufacturing, the average workweek held steady at 40.1 hours, the fifth month in a row at that level, and overtime edged down by 0.1 hour to 3.0 hours. The average workweek for production and nonsupervisory employees edged up by 0.1 hour to 33.8 hours.

Average hourly earnings rose 0.2 percent to $33.82. Over the past 12 months, average hourly earnings have increased 4.3 percent. The average hourly earnings of private-sector nonsupervisory and production employees rose by 6 cents, a 0.2 percent increase, to $29.00.

Earlier this week, the Labor Department said that job listings came in at 8.8 million on the last day in July, below the lowest end of the range of forecasts. This suggests that demand for workers has fallen.

Yet employers are still holding on to workers. Jobless claims, which are a proxy for layoffs, fell by 4,000 last week to 227,000. The four-week moving average of claims, which smoothes out some of the weekly volatility, rose by 250 to 237,500.

A report released Tuesday by payroll processor ADP suggested a steep decline in hiring by businesses in August. Private payrolls expanded by 177,000 this month,  down from 371,000 in the prior month, the monthly private sector jobs report by the ADP Research Institute said.

The monthly jobs figures came in below expectations in both June and July, breaking a several months long streak in which jobs numbers consistently came in higher than forecast.