WASHINGTON » Employers are sketching a hazy picture of the U.S. job market for the Federal Reserve to weigh in deciding this month whether to reduce its stimulus for the economy — and, if so, by how much.
The economy added 169,000 jobs in August but many fewer in June and July than previously thought. The unemployment rate fell to 7.3 percent, the lowest since 2008, but only because more people stopped looking for work and were no longer counted as unemployed.
All told, Friday’s report from the Labor Department pointed to a lukewarm job market: Hiring is steady but subpar. Much of the growth is in lower-paying occupations. And many people are giving up on their job searches in frustration. The proportion of Americans working or looking for work reached its lowest point in 35 years.
The sluggish jobs report reflects a U.S. economy that’s still struggling to accelerate. The economy grew at a modest 2.5 percent annual rate from April through June, and most analysts think it’s weakened since then.
The Fed has been buying $85 billion a month in Treasury and mortgage bonds to try to keep home-loan and other borrowing rates low. Many economists have expected the central bank to taper its monthly purchases after it meets Sept. 17 and 18. Friday’s data might lead the Fed to slow its bond buying more gradually than it might have otherwise.
"Soft employment gains only muddied the waters," said James Marple, an economist at TD Economics. "While the data did not take September tapering off the table, it does suggest that the Fed will use a lighter touch."
The revised job growth for June and July shrank the previously estimated gain for those months by 74,000. July’s gain is now estimated at 104,000 — the fewest in more than a year and down from a previous estimate of 162,000. June’s was revised to 172,000 from 188,000.
In the past three months, employers have added an average of just 148,000 jobs. For the first five months of the year, they had added an average of 199,000.
Stock prices rose and fell through the day as traders pondered the job report’s impact on the Fed and tensions over the prospect of U.S. military action against Syria. The Dow Jones industrial average finished down nearly 15 points. Broader stock averages closed essentially flat.
The yield on the 10-year Treasury note slipped to 2.93 percent, from 2.95 percent before the jobs report was released.
One possible concern for the Fed is that most of the hiring in August was in lower-paying occupations. This continues a trend that emerged earlier this year.
For example, retailers such as clothing stores, groceries and electronics outlets added 44,000 jobs. Hotels, restaurants and bars added 27,000. Temp hiring rose by 13,000.