The US unemployment rate rose 0.3 points to 3.8% in August as more Americans decided to re-enter the labor market.
More than 500,000 additional Americans joined unemployment in August, according to data released Friday by the Bureau of Labor Statistics, bringing the total number to 6.3 million. Meanwhile, the number of people participating in the civilian workforce increased by 736,000.
Overall, the US added 187,000 jobs in August, which was higher than the figures for June and July. New jobs came even as interest rates were raised to reduce inflation. While rising interest rates typically lead to a decrease in employment, BLS data shows that more people are working than ever before.
Bureau of Labor Statistics Noted that the US workforce participation rate increased to 62.8% in August 2023 from 62.1% in July 2022.
Before the last major recession in 2008, the federal funds effective rate was a relatively high 5.25%. After spending nearly 15 years below 3%, the rate climbed back above 5% this year.
After several months of high interest rates, 2008 began with 116 million workers laid off. As of the end of 2009, there were 107 million people in jobs in the US.
Federal Reserve Chairman Jerome Powell stated that the goal of the Federal Reserve is to bring inflation down to 2% per year. Based on the latest Consumer Price Index, inflation was on track for an annual increase of 3.2% in July 2023.
Salaries for Federal Reserve are also of interest. Pay rose an average of $6 per week, according to data released Friday, as the average hourly rate for workers rose 8 cents to $33.82.
It remains to be seen whether the Federal Reserve chooses to raise rates. The next Federal Reserve meeting will be held on September 19-20, when interest rates may rise again.
Powell said last week, “We will proceed with caution as we decide whether to further tighten the policy rate or, instead, hold the policy rate steady and await further data.” “Restoring price stability is essential to achieving both sides of our dual mandate. We will need price stability to achieve a sustained period of strong labor market conditions that benefit all.”