America’s jobs creation cools in August as Trump hammers Fed

America’s jobs engine downshifted in August as employers unexpectedly held back hiring across major industries, another sign that the world’s largest economy could be weakening, government data showed on Friday.

As the numbers were released, President Donald Trump, whose record as a job creator could wane ahead of next year’s elections, renewed his attacks on the US central bank, which he blames for failing to stimulate the economy fast enough.

The surprisingly weak result confirmed that labour markets in 2019 have softened from their brisk pace last year amid a protracted trade dispute with China that has dragged down global trade, caused a spike in business uncertainty and driven US manufacturing into recession.

Employers added 130,000 net new positions for the month, far lower than analyst forecasts, while the jobless rate held steady at 3.7 per cent for the third month in a row, and wages rose, according to Labor Department estimates.

Estimates for the May and June were also cut by a total of 20,000 positions, bringing the rolling, three-month average to 156,000 positions, well below the 241,000 seen in August last year.

Amid weak investment by companies and mounting fears of a recession, employers also say they are struggling to find qualified workers to fill open positions.

The soft jobs numbers should also add to pressure on the Fed to cut interest rates later this month, as economists widely expect it to do.

Late Thursday and early Friday, Trump took to Twitter for the latest of many attacks on the US central bank, which he said had raised interest rates too quickly last year.

“They were WAY too early to raise, and Way too late to cut − and big dose quantitative tightening didn’t exactly help either,” said Trump, who has advance access to the jobs report.

“Where did I find this guy Jerome?” he said, referring to Fed Chairman Jerome Powell, whom he appointed.

“Oh well, you can’t win them all!” Workers, however, got a bump in pay, as hourly wages rose 11 cents on average, putting them up more than three per cent, year-on-year, for the 13th month in a row. Within the August details, there were other causes for concern.

About quarter of August hires came from the government itself as federal authorities prepare to conduct next year’s census.

Private-sector employers added only 96,000 jobs in August, well below the 145,000 economists had forecast.

In the dominant service sector, the retail, transportation and utilities industries all shed jobs for at least the second month in a row.

Workforces also shrank in the mining sector, likely suffering weak oil prices.

Hiring was cut in half in the education and health industries and was flat for auto manufacturers and information services as well as leisure and hospitality.

US stocks opened higher on Friday as China rolled out a stimulus plan to shore up its flagging economy and weak jobs data cemented expectations of an interest rate cut by the Federal Reserve later this month.

The Dow Jones Industrial Average rose 62.10 points, or 0.23%, at the open to 26,790.25. The S&P 500 opened higher by 4.33 points, or 0.15%, at 2,980.33. The Nasdaq Composite gained 8.75 points, or 0.11%, to 8,125.58 at the opening bell.

Europe’s main Stock markets were mixed on Friday as US jobs data pointed to a possible soft patch for the world’s top economy, dealers said.

Eagerly-awaited non-farm payrolls (NFP) numbers missed analysts’ forecasts but “fit into the current market narrative” that the US Federal Reserve will cut interest rates this month, Markets.com analyst Neil Wilson said.

Interest rate cuts normally boost share prices.

Asian indices had risen earlier in the day on news that the United States and China are to resume high-level trade talks in October.

On foreign exchanges the pound held above $1.23 on the brighter prospect that Britain could avoid crashing out of the European Union with no deal next month.

The NFP numbers suggest US economic activity is slowing down, reinforcing expectations of more and/or bigger interest rate cuts by the US Federal Reserve this year.

The data also showed a slight gain in wages “that indicates inflationary pressures may start to creep up on the Fed,” Wilson noted.

“This is perhaps the largest area for concern for equity markets within this report, albeit still nothing to induce panic,” he said.

Meanwhile, after a tumultuous August, dealers got a shot in the arm this week from news that Beijing and Washington are to resume trade talks next month.

China’s commerce ministry said Vice Premier Liu He, Beijing’s point man on trade, agreed to October talks in a call with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday.

This week also saw China flag plans for fresh economy-boosting measures.

“In recent months, there has been a lot of tough talk from both sides, but the prospect of the two sides sitting down, and holding trade talks has lifted sentiment,” said David Madden, market analyst at CMC Markets UK.

Agencies