WASHINGTON — U.S. employers added a modest 130,000 jobs in August, a sign that hiring has slowed but remains durable in the face of global economic weakness and President Donald Trump's trade war with China.
The unemployment rate remained 3.7% for a third straight month, the Labor Department said Friday, near the lowest level in five decades. And more Americans entered the workforce in August, a positive development that increased the proportion of adults who are either working or seeking work to its highest level since February.
August's job gain was boosted by the temporary hiring of 25,000 government workers for the 2020 Census. Excluding all government hiring, the economy added just 96,000 jobs in August, the fewest since May.
Yet the monthly jobs report provided some positive signals: Average hourly pay, for example, rose 11 cents in August to $28.11, up 3.2% from a year earlier. That is easily ahead of inflation and increases Americans' spending power.
The slower pace of hiring does suggest that Trump's trade war with China might be discouraging some companies from hiring. Still, even with more moderate job growth, rising employment and paychecks are expected to continue to fuel consumer spending, the primary driver of growth. The economy's expansion has entered its 11th year, the longest on record.
And for now, Americans are still spending. Consumer spending rose in the April-June quarter by the most in five years. It had also increased at a healthy clip in July.
That is especially significant now because many businesses have cut their spending and delayed expansion and investment given their uncertainty about the duration and impact of the trade war. In addition, retaliatory tariffs from China have cut into U.S. exports.
"With slower, but still-solid job gains and good wage growth, households will continue to spend," Gus Faucher, chief economist at PNC, said. "The U.S. economy should avoid recession."
Over the past six months, employers have added an average of 150,000 jobs, down from an average of 223,000 last year. In its report Friday, the government revised down its estimate of job growth for June and July by a combined 20,000.