U.S. job growth slows in August

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Meanwhile, employment gains for June was revised down to 210,000 from 231,000 previously reported, and job gains in July was revised lower to 189,000 from 209,000.

Persistently sluggish wage growth could, however, make the US central bank cautious about raising interest rates again this year.

Traders initially sold the dollar in a knee-jerk reaction to Labor Department data showing nonfarm payrolls increased by 156,000 last month, below expectations of economists polled by Reuters for a gain of 180,000.

In August, the average hourly earnings rose by 3 cents to 26.39 USA dollars, after rising by 9 cents in the previous month.

Wage growth has consistently disappointed with average hourly earnings up just 2.5 percent over the past year. Economists said the storm could hurt September payrolls if the disruption from the flooding lingers.

In August, the US economy added 156,000 jobs, fewer than economist forecasts of 180,000.

US hiring slows in August; jobless rate rises to 4.4%
U.S. job growth slows in August

While job growth slightly slowed last month, the overall labor market recovery remains solid so far this year. "This is about double the pace needed to keep up with underlying growth in the labor force, and thus job market slack continues to diminish", Faucher said. Construction employment jumped by 28,000 last month, the largest gain since February.

"If the markets are discounting a December (Fed rate hike) just on the back of this, it's probably premature", said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Ltd in NY.

Lack of strong wage growth raises concerns about the sustainability of a recent surge in consumer spending, which spurred the fastest economic growth in more than two years in the second quarter.

"The economy has added 185,000 jobs per month on average over the past three months".

That said, Harvey's impact is not accounted for in this jobs report.

Payrolls at nonstore retailers rose only 700 despite online retailer Amazon.com holding a series of job fairs to recruit about 50,000 workers last month.

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