The U.S. added 130,000 jobs in August, the Labor Department reported Friday, falling below expectations amid an escalating trade war with China and a slowing global economy.
The August jobs report missed expectations after economists broadly projected employment growth closer to the 164,000 workers the U.S. added in July. The unemployment rate held steady at 3.7 percent, while the labor force participation rate rose to 63.2 percent, according to the release from the U.S. Bureau of Labor Statistics.
While the U.S. economy has added jobs at a slower rate in 2019 than last year, it has remained largely resilient as European and Asian powers face sharper downturns amid rising trade tensions.
But the August jobs report is not likely to soothe concerns that a global slowdown could trigger a recession within the U.S. after more than a decade of consistent economic growth.
The private sector added just 96,000 of the 130,000 jobs gained in August, and 25,000 of the new workers added last month were short-term hires to conduct the 2020 census. That drags down the total number of jobs added in August to roughly 100,000, well below the gain of 195,000 private sector hires projected Thursday by the ADP Research Institute.
Job growth in July was also revised lower by 5,000 jobs to a gain of 159,000 workers, and June’s gain of 193,000 jobs was cut to 178,000 new workers. The revisions drove the average monthly jobs gain in 2019 down to 158,000, well below the 223,000 average monthly gain in 2018.
Though the U.S. is expanding at a slower rate, economists said that the economy is still adding jobs and growing the workforce fast enough to keep unemployment near record lows.
“This pace is faster than you need to keep the unemployment and participation rates constant,” tweeted Jason Furman, chairman of the White House Council of Economic Advisers under former President Obama.
Furman also called the labor force participation rate increase “a big improvement for this stage of the recovery, especially when demography should be pulling the employment rate down.”
While the U.S. is adding enough jobs on aggregate to maintain the expansion, key industries on the frontlines of Trump’s trade war with China and battles with Europe have struggled to keep up.
Employment was little changed in the construction, manufacturing, transportation and warehousing industries. Analysts attribute some of the turbulence to a slowdown in U.S. exports, higher prices for goods subject to Trump’s tariffs and flagging business investment amid an escalating trade war.
“Factory job growth has clearly stalled. Two very weak months with nominal gains of 4k (July) and 3k (August),” tweeted Scott Paul, president of the Alliance for American Manufacturing, a trade group advocating for U.S. manufacturers.