STEVE INSKEEP, HOST:
We now have some numbers showing the U.S. job market at another solid but unexceptional performance. Today's employment report showed 151,000 new jobs added to payrolls last month. Meanwhile, the unemployment rate held steady at 4.9 percent. As NPR's John Ydstie reports, the news will keep analysts guessing about just when the next Federal Reserve interest rate hike will come.
JOHN YDSTIE, BYLINE: During the Federal Reserve's annual Jackson Hole conference last week, it became clear Fed officials would be watching today's jobs report very closely. In a speech there, Fed Chair Janet Yellen said the solid performance of the job market has strengthened the case for another rate hike. A few minutes later, the Fed's second in command, Stanley Fischer, told CNBC - with typical Fed understatement - that the August jobs report will be important.
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STANLEY FISCHER: That will probably weigh in our decision.
YDSTIE: But the August employment data came in below economists' expectations. Carl Tannenbaum, chief economist at Northern Trust in Chicago, says that's likely to rule out a rate hike when Fed policymakers meet later this month.
CARL TANNENBAUM: This morning's job report was good but probably not good enough to prompt a near-term move from the Federal Reserve.
YDSTIE: But Tannenbaum says today's report, coupled with strong job growth in June and July, plays into a narrative that should lead the Fed to a rate hike in December.
TANNENBAUM: We have had a nice year of job creation where payrolls have expanded very well. In addition, the inflation picture is starting to move to where the Fed would like to see it. And concerns about financial stability have ebbed.
YDSTIE: Remember, the Fed was concerned that the British vote to exit from the European Union might cause damaging financial turmoil that could hurt the U.S. economy. But so far that hasn't happened. Maybe the most disappointing element of the August jobs report, says Tannenbaum, is a meager one-tenth of a percent rise in hourly wages, bringing the year-over-year increase in wages down to just below two and a half percent.
On the other hand, says Tannenbaum, even with August's unexceptional report, job growth in the past three months has averaged a very strong 232,000, and that means a considerable boost to paychecks.
TANNENBAUM: With the jobs that we've created this year, we've also restored incomes for people who will now turn around and spend that revenue.
YDSTIE: That bodes well for stronger economic growth in the second half of this year. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.
