The United States economy has created 96,000 jobs in August according to the latest data from the Bureau of Labour Statistics a figure lower than predicted by economists and has raised the possibility of the Federal Reserve starting a new round of monetary easing.
Today’s data has seen the nation’s unemployment rate fall to 8.1% compared with 8.3% in July. Despite this, many American economists are disappointed after they had predicted that the figure would grow by 125,000.
The weak figures will no doubt put pressure on President Barrack Obama, as he attempts to win a second term in the White House. His political rival, Republican Mitt Romney has put job creation at the centre of his push for the presidency.
Federal Reserve chairman Ben Bernanke said last week that the stagnation in the labour markets was of great concern, raising expectations for a further round of monetary easing in a bid to get the US economy moving again.
“The stagnation of the labor market in particular is a grave concern,” he said. Persistently high unemployment “will wreak structural damage on our economy that could last for many years.”
Private payrolls, which exclude government agencies, rose 103,000 after a revised gain of 162,000. They were projected to rise by 142,000, the survey showed.
The jobless rate fell from 8.3 percent as 368,000 Americans left the labour force. Unemployment was forecast to hold at 8.3 percent, according to the survey median.
“This weak employment report, in jobs, wages, hours worked and participation is probably the last piece the Fed needs before launching another round of quantitative easing next week,” said Joseph Trevisani, chief market strategist at Worldwide Markets.
The economy has experienced three years of growth since the 2007-09 recessions, but the expansion has been grudging and the jobless rate has held above 8 percent for more than three years – the longest stretch since the Great Depression.
The poor jobs data adds to the sense of disappointment over the US economy’s recovery and wasn’t helped by the latest data from Markit for the Manufacturing PMI. The Index came in at 51.5 in August only slightly up from July’s figure.
The US Dollar has weakened on the back of the data and the improving demand for riskier commodity based currencies such as the Canadian and Australian Dollar.
The Pound to Euro exchange rate is currently trading at 1.253
The Pound to US Dollar exchange rate is currently trading at 1.599
The Pound to Australian Dollar exchange rate is currently trading at 1.541
The Euro to US Dollar exchange rate is currently trading at 1.275
The Euro to Pound exchange rate is currently trading at 0.797
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