MINNEAPOLIS — For the second straight month, the federal jobs report from the Bureau of Labor Statistics showed slower than expected job growth across the U.S., as the Federal Reserve now prepares to lower interest rates this month.
According to the report, the U.S. added 142,000 jobs in August. Meanwhile, the unemployment rate dipped slightly to 4.3 percent.
The report is an indication of a slowdown in hiring compared to the post-COVID boom that began in 2021.
Paul DeBettignies, an expert in the job recruiting industry and founder of Minnesota Headhunter LLC, said the August jobs report was "just okay."
"We are still producing jobs in this country. It's just not as busy as it was," DeBettignies said. "I think companies are doing a bit of wait-and-see. Wait and see what happens with the election, wait and see if the Federal Reserve is going to start lowering rates."
In a speech at Notre Dame on Friday, Federal Reserve Governor Christopher Waller hinted at a decrease in the federal funds rate later this month and possibly more cuts in the future. The rates have remained unchanged since last summer, after the Fed steadily increased them in response to high inflation.
"Determining the appropriate pace at which to reduce policy restrictiveness will be challenging. Choosing a slower pace of rate cuts gives time to gradually assess whether the neutral rate has in fact risen, but at the risk of moving too slowly and putting the labor market at risk," Waller said. "Cutting the policy rate at a faster pace means a greater likelihood of achieving a soft landing but at the risk of overshooting on rate cuts if the neutral rate has in fact risen above its pre-pandemic level."
Waller also said that "while I don't see the recent data pointing to a recession, I do see some downside risk to employment that I will be watching closely."
"But at this point," he continued, "I believe there is substantial evidence that the economy retains the strength and momentum to keep growing, supported by an appropriate loosening of monetary policy."
Most experts anticipate that the Fed could lower rates by a quarter-percentage point in September.
"Whether one says we're going to be in a recession... we have been in a recession of momentum. We've been in a recession of emotions. We're all a little scared, a little uncertain," DeBettignies said. "The Fed reducing rates will give us some sense that borrowing becomes a little easier, both for consumers and for companies. If the Fed is going to give a series of these rate cuts, that does make borrowing less expensive, and does make it so employers have an easier time to grow."
Given the job market, DeBettignies suggested that workers looking for job -- or thinking about looking for one -- should make sure they have updated resumes.
"This market isn't going to last forever," he said. "Be ready for those opportunities."