US job growth slowed more than expected in August, with retail hiring declining for a seventh month in a row, new figures show today.
But strong wage gains should support consumer spending and keep the economy expanding moderately amid rising threats from trade tensions.
The Labor Department's closely watched monthly employment report today also showed a rebound in the workweek as manufacturers increased hours for workers after slashing them in July.
The US economy's waning fortunes, underscored by an inversion of the US Treasury yield curve, have been largely blamed on the White House's year-long trade war with China.
Washington and Beijing slapped fresh tariffs on each other on Sunday.
While the two economic giants this week agreed to hold high-level talks in early October in Washington, the uncertainty, which has eroded business confidence, lingers.
The economy is also facing headwinds from Britain's potentially disorderly exit from the European Union, and softening growth in China and the rest of the world.
The US Federal Reserve is expected to cut interest rates again this month to keep the longest economic expansion in history, now in its 11th year, on track. The Fed lowered borrowing costs in July for the first time since 2008.
US non-farm payrolls increased by 130,000 jobs last month, the government said.
The US economy created 20,000 fewer jobs in June and July than previously reported. Economists polled by Reuters had forecast payrolls rising by 158,000 jobs in August.
A seasonal quirk could account for last month's less-than-expected increase in employment. Over the past several years, the initial August job count has tended to exhibit a weak bias, with revisions subsequently showing strength.
But slower job growth is also in line with sharp declines in both the Institute for Supply Management's manufacturing and services industries employment measures in August.
In addition, global outplacement firm Challenger, Gray & Christmas reported a 37.7% jump in planned job cuts by US-based employers in August.
Job gains have averaged 156,000 over the last three months, but still above the roughly 100,000 per month needed to keep up with growth in the working age population.
The US unemployment rate was unchanged at 3.7% for a third month in a row as more people entered the labour force.
Though the trade impasse does not appear to be spilling over to the labor market, job growth has been slowing since mid-2018.
The US government last month estimated that the economy created 501,000 fewer jobs in the 12 months up to March 2019 than previously reported, the biggest downward revision in the level of employment in a decade.
That suggests job growth over that period averaged around 170,000 per month instead of 210,000. The revised payrolls data will be published next February.
The US government has also trimmed economic growth for the second quarter.
The employment report showed average hourly earnings gained 0.4% last month, the largest increase since February, after rising 0.3% in July.
But the annual increase in wages dipped to 3.2% from 3.3% in July as last year's surge dropped out of the calculation. Strong consumer spending is supporting the economy.
The workweek rebounded after dropping to its lowest level in nearly two years in July.
The average workweek rose to 34.4 hours in August from 34.3 hours in July. A measure of hours worked, which is a proxy for gross domestic product, increased 0.4% after falling 0.2% in July.
US manufacturing employment rose by a tepid 3,000 jobs last month after increasing 4,000 in July.
The weakness was flagged by the report on Tuesday from the ISM showing its gauge of factory employment dropped in August to its lowest level since March 2016.
Manufacturing has ironically borne the brunt of the Trump administration's trade war, which the White House has argued is intended to boost the sector. The manufacturing workweek rose 0.2 hours to 40.6 hours.
Construction payrolls increased by 14,000 jobs after slipping by 2,000 in July. Retail employment dropped by 11,100 jobs, extending a decline that started in February.
Government employment jumped by 34,000 jobs, boosted by temporary hiring for the 2020 decennial census.