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What to Make of August’s Jobs Report

August’s 315,000 job gain was the lowest monthly result since April last year, according to U.S. Bureau of Labor Statistics data excluding farm-related employment.

Well off from July’s 526,000 increase, last month’s total could still ease concerns that the Federal Reserve has to hike interest rates by more than 0.50 percent. Higher increases would mean more expensive borrowing costs for businesses already hurting from four rate hikes so far this year.

The labor market is just one metric on the Fed’s review list. The Conference Board believes persistently high inflation might be enough for the Fed to authorize another 0.75 percent hike. “With the Fed expected to further raise interest rates and economic activity already slowing, job growth is likely to decelerate over the next months,” said The Conference Board, which expects a short, mild recession to grip the economy before January.

August’s unemployment rate also rose to 3.7 percent. Wages grew during the month, with the average hourly earnings up 5.2 percent from a year ago. Job gains were seen in professional and business services, health care and retail trade.

The retail trade added 44,000 jobs in August and 422,000 over the past 12 months, the bureau reported on Friday. Employment at general merchandise stores rose by 15,000.

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However, employment at furniture and home furnishings stores continued to trend down, losing 3,000 jobs in August. Home goods is one of the retail subsectors on the S&P watch list. The category has the highest probability of default, hurt by a number of distressed situations. Bed Bath & Beyond’s troubles has some wondering if a bankruptcy is in the cards.

Meanwhile, some experts see glimmers of hope in the jobs data.

“August’s jobs report was weaker in the best way possible as far as the Fed is concerned, and may be just what the inflation doctor ordered,” Wells Fargo economists Sarah House and Michael Pugliese said in a research note. While the moderate gain suggests slightly weaker demand for workers, the “greater availability of workers ushers in a key factor to tamping down inflation,” they added, noting the uptick in people joining the workforce.

The August jobs report suggests the Fed may still be able to engineer a “soft-landing” that reins in inflation without crashing the U.S into a recession and sending hordes to the unemployment line.