Unemployment rate drops slightly
By: Jon Prior
September 6, 2013 08:37 AM EDT
The U.S. economy added 169,000 jobs in August while the unemployment rate dropped slightly to 7.3 percent, federal economists reported Friday.
The jobs report comes as Federal Reserve officials prepare to meet later this month to determine if the economy is improving enough for the central bank to slow its stimulus programs. Financial markets anticipate that the Fed will scale back the bond buying program it has used to keep interest rates low and boost investment and lending.
The numbers released on Friday by the Labor Department are unlikely to change these expectations. Economists had expected the economy to create 175,000 jobs in August, according to a Bloomberg survey.
The looming Fed decision has already sent interest rates rising on mortgages and other products in recent months. Some have raised concerns that the economy is still too fragile and that the Fed could be moving too quickly, while others worry that ongoing stimulus could lead to inflation, although there is little evidence prices are climbing quickly.
The numbers released Friday show that the economy continues to slowly heal from the recession that followed the 2008 financial crisis.
The employment report also arrives as lawmakers prepare to return for a fall session that will be filled with economically consequential decisions that could determine how quickly this recovery continues. By the end of this month Republicans and Democrats will have to agree on how to keep the government funded into the fiscal year beginning in October or risk a government shutdown.
In addition, the Treasury Department is warning that the government’s borrowing limit will need to be increased by mid-October to avoid a market and economy rattling default.
For now, both parties are holding to their negotiating positions and it’s unclear what type of deal can be struck to avoid a government shutdown or default.
The jobs number has a margin for error of plus-or-minus 100,000 jobs, while the unemployment rate has a margin for error of about plus-or-minus 0.2 percent.