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US Unemployment Rate Surges to 3.8%; Labor Market Still Has Momentum


WASHINGTON, Sept 1 (Reuters) – U.S. job growth picked up in August, but the unemployment rate jumped to 3.8% and wage gains moderated, suggesting that labor market conditions were easing and cementing expectations that the Federal Reserve will not raise interest rates this month.

The closely watched employment report from the Labor Department on Friday also showed 736,000 people entered the job market last month, boosting the participation rate to the highest level in 3-1/2 years. Concerns about an economic slowdown are probably luring people back into the labor market.

The economy created 110,000 fewer jobs than previously reported in June and July, which some economists said suggested there had been business closures that were not previously captured.

The report followed news this week that job openings dropped to the lowest level in nearly 2-1/2 years in July.

The labor market is slowing in response to the U.S. central bank’s hefty rate hikes to cool demand in the economy.