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Sept. 6, 2019, 10:19 a.m. EDT

U.S. creates just 130,000 new jobs in August, keeping Fed on track to cut rates

U.S. unemployment rate unchanged at 3.7%

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By Jeffry Bartash, MarketWatch

The numbers: The economy added just 130,000 new jobs in August, marking the smallest increase in three months and offering more evidence that hiring has slowed amid a broadening trade dispute with China that’s disrupted the U.S. and global economies.

The soft employment figures are all but certain to keep the Federal Reserve on track to cut interest rates later this month, even after another sharp increase in wages. Hiring fell well short of the 170,000 MarketWatch forecast.

The gain in new jobs was even weaker if hiring tied to the upcoming U.S. Census is stripped out. The private sector added fewer than 100,000 new jobs last month, the government said Friday .

The unemployment rate was unchanged at 3.7%.

U.S. stocks rose in Friday trades in anticipation of a reduction in interest rates.

Read: Jobs report called ‘meh’ as hiring slows

A few big caveats: The government’s initial estimate of new jobs created in August has missed Wall Street’s forecast by an average of 43,000 in seven of the past 10 years.

With so many people on vacation, the number of respondents to the government’s monthly questionnaire is often the lowest of the year. As more responses are returned, the government usually ends up revising job growth higher.

Employment gains also appeared to be more robust in August based on a broader if more volatile survey of households, though the start of school usually has something to do with it.

Some 571,000 people entered the labor force in August and nearly 590,000 found work — the biggest advance in 18 months.

What happened: Professional and business services led the way again in hiring by adding 37,000 new jobs. Health-care providers boosted employment by 24,000 and financial companies created 15,000 new positions.

Last month the federal government increased payrolls by 28,000, mostly temporary workers needed to help prepare the Census that takes place every 10 years.

Retailers and energy companies cut jobs. Under siege from online competitors, traditional brick-and-mortar retailers have reduced employment for seven months in a row. And oil drillers are coping with lower petroleum prices.

Employment gains for July and June, meanwhile, were revised down by a combined 20,000.

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