The pace of United States job losses hit a one-year low last month but the unemployment rate jumped to a 26-year high of 9,7%, the government said on Friday in a report showing a slowly improving labour market.
The Labour Department said employers cut 216 000 jobs, the smallest since August 2008, and revised job losses for June and July to show 49 000 more jobs lost than previously reported.
Analysts had expected non-farm payrolls to drop 225 000 in August and the unemployment rate to rise to 9,5%.
”It certainly sustains perceptions that the economy gradually is swinging to recovery. The main pitfall would be continued weak income growth but that was not the case in August, so that’s encouraging,” said Pierre Ellis, senior economist at Decision Economics in New York.
US stock index futures rose after the jobs data, while the dollar weakened against the euro. US government debt fell on the data.
Since the start of the recession in December 2007, the economy has shed 6,9-million jobs, the department said. Stubbornly high unemployment is wearing on consumer confidence and crimping domestic demand, pointing to an anaemic recovery from the worst slump in 70 years. Consumer spending accounts for over two-thirds of US economic activity.
However, the August report confirmed the pace of layoffs was easing from early this year, when nearly three quarters of a million jobs were lost in January. — Reuters