Sluggish US jobs report clears the way for interest rate cut

WORLD NEWS IN BRIEF

WASHINGTON

Hiring by America's employers picked up a bit in August from July's tepid pace, and the unemployment rate dipped for the first time since March in a sign that the job market may be cooling but remains sturdy.

Employers added a modest 142,000 jobs, up from a scant 89,000 in July, the Labor Department said Friday. The unemployment rate ticked down to 4.2 percent from 4.3 percent, which had been the highest level in nearly three years. Hiring in June and July, though, was revised sharply down by a combined 86,000. July's job gain was the smallest since the pandemic.

"The labor market is weakening," said Eugenio Aleman, chief economist at Raymond James Financial. "It is not falling apart, but it is weakening."

The cooling jobs figures underscore why the Federal Reserve is set to cut its key interest rate when it next meets Sept. 17-18, with inflation falling steadily back to its target of 2 percent. Still, Friday's mixed jobs data raises the question of how large a rate cut the Fed will announce. It could decide to reduce its benchmark rate by a typical quarter-point or by a larger-than-usual half-point. In the coming months, the policymakers will also decide how much and how fast to cut rates at their subsequent meetings.

In a major speech last month, Chair Jerome Powell suggested that the Fed's policymakers have all but tamed inflation through high interest rates and don't want to see the job market weaken further. The central bank is trying to achieve a "soft landing," in which it succeeds in driving inflation down from a 9.1 percent peak in 2022 to its target level without causing a recession. A lower Fed benchmark rate will lead eventually to lower borrowing costs for a range of consumer and business loans, including mortgages, auto loans and credit cards.

For now, companies are posting fewer job openings and adding fewer workers, while Americans are far less likely to quit their jobs now than they were soon after the economy rebounded from the pandemic. In a strong job market, workers are more likely to quit, usually for higher-paying opportunities. With quits declining, it means fewer jobs are opening up for people out of work.

A slower pace of hiring is often a precursor to layoffs - one reason why the Fed's policymakers are now more focused on sustaining the health of the job market than on continuing to fight inflation.

The Fed's Beige Book, a collection of anecdotes from the 12 regional Fed banks, reported that many employers appeared to have become pickier about whom they hired in July and August. And a survey by the Conference Board in August found that the proportion of Americans who think jobs are hard to find has been rising, a trend that has often correlated with a higher unemployment rate.

At the same time, consumer spending, the principal driver of economic growth in the United States, rose at a healthy pace in July. And the economy grew at a solid 3 percent annual pace in the April-June quarter.

JENIN REFUGEE CAMP, WEST BANK

Israeli forces appear to withdraw from a West Bank camp after a major military operation

Israeli forces appeared to have withdrawn from three refugee camps in the occupied West Bank by Friday morning, after a more-than weeklong military operation that left dozens dead and a trail of destruction.

Overnight, Israeli armored personnel carriers were seen leaving the Jenin refugee camp from a checkpoint set up on one of the main roads, and an Associated Press reporter inside the camp saw no evidence of any remaining troops inside as dawn broke early Friday morning.

During the operation, Israeli military officials said they were targeting militants in Jenin, Tulkarem and the Al-Faraa refugee camps in an attempt to curb recent attacks against Israeli civilians they say have become more sophisticated and deadly.

Troops were pulled out of the Tulkarem camp by Friday morning and had left Al-Faraa earlier, but in a statement the Israeli military suggested the operation was not yet over.

WASHINGTON

Harris raised $361 million in August from nearly 3 million donors, campaign says

Vice President Kamala Harris raised well more than double what former President Donald Trump took in from donors in August, her campaign announced Friday, saying it raised $361 million from nearly 3 million donors in her first full month as a candidate.

Trump's team had announced Wednesday he brought in $130 million over the same period. Harris' team says it ended the month with $404 million on hand for the final sprint to Election Day, $109 million more than Trump's campaign says it had at the end of August.

The massive Harris war chest is being used to fund a $370 million paid media effort for the final two months of the campaign, and to pay for its more than 2,000 field staff spread through more than 310 offices in battleground states.

Harris' fundraising builds on the $310 million she raised in July, the overwhelming majority of which came in after she took over President Joe Biden's campaign after he dropped out that month. The ticket swap has helped the Democratic party reverse the fundraising edge Trump had developed in the prior months, when voter doubts about Biden's fitness for another term dampened donor - and voter - enthusiasm.

"In just a short time, Vice President Harris' candidacy has galvanized a history-making, broad and diverse coalition - with the type of enthusiasm, energy and grit that wins close elections," Harris campaign manager Julie Chavez Rodriguez said in a statement. "As we enter the final stretch of this election, we're making sure every hard-earned dollar goes to winning over the voters who will decide this election."

- The Associated Press