WASHINGTON (9/8/14)--After a steady string of months with 200,000 job adds or more, job creation fell well short of expectations in August, as the economy only added 142,000 jobs (Economy.com Sept. 5).
Despite the step back, which was driven by weaknesses in manufacturing, construction and retail trade, the unemployment rate inched down to 6.1% and the three-month moving average came in at 207,000, according to the Bureau of Labor Statistics' employment situation report.
"The top-line payroll number looks weak for August, but the details reveal a much more solid labor market," said Sophia Koropeckyj, Moody's analyst (Economy.com), who added that enough progress has been made in previous months that August's performance, while disappointing, was sufficient to further reduce labor market slack.
Bright spots in the report included several industries that maintained a steady pace of growth, including professional and business services, which added 47,000 jobs, and health care, which added 43,000 jobs.
The drop in unemployment, meanwhile, can be attributed to a lower unemployment rate among teenagers and less-educated workers, Moody's said. Though, household job gains fell flat and the labor force participation rate inched lower to 62.8% from 62.9% in July.
Additionally, private-sector payrolls added 204,000 jobs in August, according to a separate report by Automatic Data Processing, a payroll processor, with job growth fairly widespread (Fortune Sept. 4).
Small businesses added the most jobs, with professional and business services again as the strongest industry in terms of job creation.
"Our current outlook is probably the most upbeat we've come up with the past seven years," Mike Schenk, interim chief economist at the Credit Union National Association, told Fortune.com. Schenk added that he believes the unemployment rate will continue to fall and the economy will expand at a rate of 3.5% in 2015.
Though, there are still obstacles in the forms of wage growth rates and labor force participation.
"We still have a long way to go before we can claim things are better," Schenk said.