U.S. job growth slows in August, unemployment rate holds steady

U.S. employers added fewer jobs than expected in August, signaling a potential cooling in the labor market amid economic uncertainties. The unemployment rate remained relatively stable, according to the latest report from the U.S. Bureau of Labor Statistics.

Nonfarm payrolls increased by 142,000 last month, falling short of the average monthly gain of 202,000 over the prior 12 months. The unemployment rate held steady at 4.2 percent, slightly higher than the 3.8 percent recorded a year earlier.

Job gains were primarily seen in construction and health care sectors. The construction industry added 34,000 jobs in August, outpacing its average monthly gain of 19,000 over the past year. Heavy and civil engineering construction contributed 14,000 new positions, while nonresidential specialty trade contractors continued an upward trend with 14,000 additional jobs.

Health care employment rose by 31,000, although this increase was only about half the average monthly gain of 60,000 observed over the previous 12 months. Ambulatory health care services and hospitals added 24,000 and 10,000 jobs, respectively.

However, manufacturing saw a decline, shedding 24,000 jobs in August, primarily due to a drop of 25,000 in durable goods industries. The sector has shown little net change over the past year.

The report also highlighted changes in long-term unemployment and labor force participation. The number of long-term unemployed, those jobless for 27 weeks or more, remained virtually unchanged at 1.5 million in August, accounting for 21.3 percent of all unemployed people.

The labor force participation rate remained steady at 62.7 percent, showing little change over the year. Similarly, the employment-population ratio held at 60.0 percent but has decreased by 0.4 percentage points compared to a year ago.

Wage growth showed some positive momentum, with average hourly earnings for all employees on private nonfarm payrolls increasing by 14 cents, or 0.4 percent, to $35.21. Over the past 12 months, average hourly earnings have risen by 3.8 percent.

The report also included downward revisions for June and July employment figures. June's total was adjusted from 179,000 to 118,000, while July's was revised from 114,000 to 89,000, resulting in 86,000 fewer jobs than previously reported for those two months combined.

As the Federal Reserve continues to monitor economic indicators for signs of inflation and overall economic health, this latest employment report may factor into future monetary policy decisions. The slower job growth could potentially influence the Fed's stance on interest rates in the coming months.