US Job Growth Slips in August After Months of Bigger Gains

American employers hired at a surprising weak pace in August, even as the unemployment rate fell slightly, the Labor Department said Friday.

With a 142,000 increase in payrolls last month, August is the first month since January that hiring slipped below the 200,000 level, an important threshold to beat if the economy is going to be able to absorb new entrants while also reducing the ranks of the long-term unemployed.

The unemployment rate dropped 0.1 percentage point to 6.1 percent last month.

Economists had been estimating a 225,000 jump in payrolls, according to a survey by Reuters before the Labor Department announcement.

After a very slow start to 2014, the pace of hiring regained momentum in the spring. Going into Friday's report, the average monthly payroll gain this year was 230,000, a sign that employers had settled into a steady pace of hiring in 2014 after years of abrupt stops and starts.

At the Federal Reserve, policy makers have been watching for improvement in the level of unemployment, as well as the participation rate and wage growth, in order to gauge when to begin the long-awaited process of gradually increasing short-term interest rates from near zero.

The central bank has signaled this will begin in the middle of 2015, although better economic news recently has prompted some economists to speculate that timetable could be moved up.

There have been several positive economic reports this week.

On Thursday, the private Institute for Supply Management said its services index for August hit a six-year high, and the Commerce Department reported that the trade deficit in July unexpectedly shrank as exports rose.

The August pace of auto sales, another closely watched bellwether for the overall economy, was the best since January 2006, well before the recession brought the domestic car industry to its knees and pushed General Motors into bankruptcy.

Over all, the economy expanded at a 4.2 percent annual rate in the second quarter, compared with a 2.1 percent contraction in the first three months of 2014. Economists foresee a growth rate of about 3 percent in the second half of this year.

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