STEVE INSKEEP, HOST:
Lot of investors were holding their breath this morning for a jobs report which is now out. The report shows that employers added 142,000 jobs last month while the unemployment rate dipped to 4.2%. So what does all that mean? NPR's Scott Horsley joins us now, as he often does. Scott, good morning.
SCOTT HORSLEY, BYLINE: Good morning, Steve.
INSKEEP: What do you make of those numbers?
HORSLEY: Well, it's a mixed picture. It does show that job growth is slowing, but maybe not as sharply as some people had feared after a really weak jobs report a month ago. You know, some of the people who were temporarily laid off in July wound up going back to work in August, so the unemployment rate ticked down a little bit. We also saw a bit of a rebound in the pace of hiring last month. Most of the jobs added in August were concentrated in health care, hospitality and construction. But employers are certainly not adding jobs as fast as they had been earlier this year or last year.
INSKEEP: And why would that be?
HORSLEY: Well, part of the slowdown is because those high interest rates the Federal Reserve imposed to get control over inflation. High interest rates make it more expensive to borrow money for big ticket items, and that has certainly weighed on some parts of the economy, like manufacturing. Factories actually cut 24,000 jobs last month. Overall, though, we're not seeing a whole lot of layoffs in this economy. For the most part, employers are trying to hang on to the workers they have now. And for the most part, workers are also staying put, in contrast to a few years ago when, you know, lots of people were quitting jobs to take other, better jobs.
INSKEEP: Great resignation, yeah.
HORSLEY: Yeah. Today, economist Nela Richardson, who's at the payroll processing company ADP, says there's just a lot less churn in the job market.
NELA RICHARDSON: Turnover is quite low. What does that mean? People are saying in their jobs. They're not quitting. We're not in the great resignation and so there's less need to hire.
HORSLEY: So this is still a pretty OK job market for people who already have jobs. For those just coming into the workforce, though, it might take longer to find a job. There are no longer as many help wanted signs out there. In fact, the number of job openings has dropped back to where it was in 2021.
INSKEEP: OK. So I think that a lot of people who follow economics, follow the economy, follow finance are less interested in this number than what this number means for that other number. What would the Federal Reserve do later this year about inflation - later this month about inflation, knowing what they do about the employment picture?
HORSLEY: Yeah. Fed policymakers are set to meet the week after next. And they've signaled pretty clearly that they're going to start cutting interest rates at that meeting. What we don't know yet is whether the Fed's go to start small with a quarter point rate cut or go big and cut rates by half a point. As it weighs that decision, the Fed's keeping a close eye on the job market. And today's report doesn't really offer a definitive signal one way or the other.
INSKEEP: OK.
HORSLEY: The dropping unemployment rate might point to a more modest rate cut. On the other hand, the job gains for June and July were revised down today, which might push in the direction of a bigger rate cut. So the Fed's going to have to sort this out as it tries to decide what to do in less than two weeks.
INSKEEP: NPR's Scott Horsley. Thanks so much.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
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