The surprising slowdown in jobs growth last month gives the Fed more reason to wait before raising interest rates. Fred Katayama reports.
A surprising slowdown in the jobs market. The U.S. economy created just 142,000 jobs last month. That's the smallest increase this year. What's more, the jobs gains for June and July were revised downward. The unemployment rate fell to 6.1 percent. The employment report strikes a stark contrast to the recent string of positive economic data. Payrolls in the retail sector fell for the first time since February, and the manufacturing sector added zilch. One bright spot: the construction industry: it added jobs for the eighth straight month. The soft numbers give Fed chairman Janet Yellen more reason to wait before raising interest rates. She's worried about slack in the economy. One number that she focuses on, average hourly wages, rose just 2.1 percent. Wells Fargo chief economist John Silvia: SOUNDBITE: JOHN SILVIA, CHIEF ECONOMIST, WELLS FARGO (ENGLISH) SAYING: "It reinforces the Fed's view they'll be cautious with respect to changing policy. They'll finish QE3 October/November, but they won't be all that anxious to be raising interest rates in the springtime as some people had expected." The dollar fell against the yen and euro, and the 10-year Treasury yield also eased. Libertyview Capital Management president Rick Meckler said, "One of the big fears of this market, maybe the only fear, has been rapidly rising interest rates. This puts an end to those thoughts in the near term." Investors will keep an eye on the Fed policy meeting in less than two weeks for more clues on the direction of rates.