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Jobs Report Shows Supply Returning Even as Fed Focuses on Demand

  • Participation rate jumped last month as job search picked up
  • If trend continues, it may bolster case for slower tightening
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US Labor Sec. Walsh on Jobs Report, Fed, Inflation

The August US jobs report contained hints of a long-awaited increase in labor supply. The big question for the central bank is whether that can continue even as it attempts to engineer an economic slowdown.

The labor force participation rate jumped to 62.4% last month, pushing the unemployment rate up to 3.7% as the share of those entering the job market who managed to find work declined. But the influx of Americans looking for work still came in the context of continued strong job creation, which historically has been a necessary ingredient for enticing people into the job hunt.