AP Economics Writer
WASHINGTON — Employers are sketching a hazy picture of the U.S. job market for the Federal Reserve to weigh in deciding this month whether to reduce its stimulus for the economy — and, if so, by how much.
The economy added 169,000 jobs in August but many fewer in June and July than previously thought. The unemployment rate fell to 7.3 percent, the lowest since 2008, but only because more people stopped looking for work and were no longer counted as unemployed.
All told, Friday's report from the Labor Department pointed to a lukewarm job market: Hiring is steady but subpar. Much of the growth is in lower-paying occupations. And many people are giving up on their job searches in frustration. The proportion of Americans working or looking for work reached its lowest point in 35 years.
The sluggish jobs report reflects a U.S. economy that's still struggling to accelerate. The economy grew at a modest 2.5 percent annual rate from April through June, and most analysts think it's weakened since then.
The Fed has been buying $85 billion a month in Treasury and mortgage bonds to try to keep home-loan and other borrowing rates low. Many economists have expected the central bank to taper its monthly purchases after it meets Sept. 17 and 18. Friday's data may lead the Fed to slow its bond buying more gradually than it might have otherwise.
Earlier this week, some signs had suggested that the economy might have strengthened. Surveys of manufacturing and service firms, for example, showed that they expanded at a healthy pace in August. But Friday's jobs report dampened such optimism.
"We've lost momentum, which is disappointing," said Diane Swonk, chief economist at Mesirow Financial. "But we may regain it. That's why (the jobs report) is not a slam-dunk pushing the Fed one way or the other."