U.S. job creation was less than expected in August, and the unemployment rate fell to its lowest point in nearly five years as workers quit searching for jobs, the government said in a report Friday that could delay the Federal Reserve (Fed) reducing its massive monetary stimulus later this month. The Labor Department reported that non-agriculture payrolls increased by 169,000 last month, adding to signs that third-quarter economic growth slowed. The unemployment rate fell to 7.3 percent, the lowest since late 2008, because people who stopped looking for work were no longer counted as unemployed. Economists had expected the economy to create 180,000 jobs last month and the unemployment rate to hold steady at 7.4 percent. Not only was August hiring less than expected, the job count for July and June was revised to show 74,000 fewer positions than previously reported. Further, the participation rate-the proportion of working-age Americans who either have a job or are searching for one-fell to its lowest level in 35 years. Hiring has slowed from the start of the year. Employers have added an average of 148,000 jobs in the past three months, significantly below the 12-month average of 184,000. The closely watched employment report will provide crucial evidence for the Fed as it debates the future of its $85 billion monthly bond-buying program, and also may affect global financial markets. The weaker jobs environment could make the Fed hesitate to reduce its stimulus. Chairman Ben Bernanke has said the central bank could begin slowing its bond purchases by the end of this year if the economy continues to strengthen, and end the purchases by mid-2014. After its September 17-18 policy meeting, the Fed will announce whether it will reduce its stimulus and, if so, by how much. The employment report suggested the economy was struggling to regain momentum after stumbling early in the third quarter. Consumer spending, home building, new home sales, durable-goods orders, and industrial production all weakened in July.
