By CHRISTOPHER S. RUGABER
AP Economics Writer
WASHINGTON (AP) _ A surprising drop in hiring and in the number of people seeking work in August sent a reminder that the U.S. economic recovery is still prone to temporary slowdowns.
Employers added just 142,000 jobs last month, well below the 212,000 average of the previous 12 months. The unemployment rate fell to 6.1 percent from 6.2 percent. But that was because more people without jobs stopped looking for one and were no longer counted as unemployed.
Analysts took Friday’s Labor Department report in stride. They noted that other gauges of the economy _ from manufacturing and construction to auto sales _ remain solid. Layoffs have dwindled, too. Analysts also noted that month-to-month volatility in hiring is common even in a healthy economy.
But the dip in hiring also suggests that, though the Great Recession officially ended more than five years ago, the economy has yet to shed some of its lingering weaknesses. Held back by sluggish pay growth, for example, consumers continue to spend cautiously.
Most economists foresee an economy that’s poised to make further strides, punctuated at times by modest setbacks.
The figures “will inevitably spark speculation that the US recovery is somehow coming off the rails again,” said Paul Ashworth, an economist at Capital Economics. “However, we’re not too concerned by what is probably just an isolated blip.”
The report showed the smallest job gains in eight months. The weaker-than-expected numbers make it unlikely that the Federal Reserve will speed up its timetable for raising interest rates. Most analysts expect the first rate hike around mid-2015.
The Dow Jones industrial average initially fell, but stocks returned to positive territory by Friday afternoon. The yield on the 10-year Treasury note dropped to 2.43 percent from 2.45 percent late Thursday. That suggests that some investors sought the safety of bonds and foresee no Fed rate increase anytime soon.
At least two temporary factors weighed on hiring in August, government officials said. A strike at Market Basket, a grocery chain in the Northeast, contributed to an unusually large drop of 17,000 jobs at food and beverage stores. That strike has since been resolved, which could lead to a rebound in hiring this month.
Officials also noted that the number of auto-manufacturing jobs fell 4,600 in August after a surge of nearly 13,000 in July. Auto jobs can be volatile during summer because carmakers often temporarily close factories in July to retool them for new models. That didn’t happen this year, which boosted July’s auto job numbers and held down August’s usual rebound.
Yet auto sales were strong in August, and last month’s job losses in that sector are unlikely to be repeated, analysts said.
The overall jobs slowdown “certainly hasn’t been confirmed by any of the other indicators that we’ve seen,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “It did smack of an outlier.”
August’s job figures tend to be unusually volatile and are typically revised later as government statisticians adjust for unusual seasonal factors such as the reopening of school and the Labor Day holiday, said Patrick O’Keefe, director of economic research at the accounting and consulting firm CohnReznick.
The biggest drops in hiring last month occurred in retail, which shed 8,400 jobs after gaining 21,000 in July, and in manufacturing, where employment was flat after a gain of 28,000 in July. Transportation and warehousing added just 1,200 jobs after gaining a robust 19,100 in July.
There were some brighter spots. Higher-paying fields, including accounting, engineering and management, posted solid job gains. And the number of people working part time who want full-time work fell more than 200,000 to 7.3 million. That was down from 7.9 million a year ago, though still far above healthy levels.
A broader measure of unemployment, which includes workers who have given up looking for jobs and the part-timers who want full-time work, dipped to 12 percent from 12.2 percent in July. That’s the lowest level since 2008, though far above the pre-recession figure of 8.8 percent.
Fed Chair Janet Yellen has said such figures show the job market hasn’t regained full health. And until those figures are closer to levels typical of a strong economy, pay growth likely won’t pick up.
Wage gains have been sluggish since the recession ended in 2009, and consumers have remained cautious. In August, average hourly pay rose 6 cents to $24.53, 2.1 percent higher than a year ago but barely ahead of the overall 2 percent inflation rate.
That could be weighing on consumers’ willingness to spend and slowing the economy. Consumer spending dipped in July, the first decline since January.
Still, more jobs ultimately help propel economic growth.
Consider Louise Smith, 30, who began a permanent job at an information technology outsourcing firm in Tyson’s Corner, Virginia, in June. She had worked there on a temporary basis since the year began.
She credits the temp job for giving her a chance to prove herself to the company, NT Connections. Now that her job as a help-desk supervisor is permanent, she’s seeking an apartment and planning to move out of her parents’ home, where she’s lived for the past year.
Economists note that such moves typically lead to purchases of furniture, appliances and electronic gear that can stimulate growth.
“I am now able to support myself, whereas before I was worried about how I was going to be able to make ends meet,” Smith said.
Most economists still expect a healthy annual growth rate of about 3 percent in the second half of this year. That would mark a sharp improvement from the 1.1 percent pace in the first half.
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AP Economics Writers Paul Wiseman and Josh Boak contributed to this report.
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Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber .