U.S. unemployment rises to 3.8 percent

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The U.S. Bureau of Labor Statistics reported on Friday that unemployment rose 3.8% during the month of August—in part due to an estimated increase of about 700,000 more people looking for work.

Meanwhile, employers added fewer than 200,000 jobs last month. Employment trended up in the areas of health care, leisure, hospitality, social assistance, and construction. Employment in transportation and warehousing is declining.

Is this good news or bad news? Economists worry that a strong demand for labor could inflate wages and drive inflation. Gus Faucher, chief economist at PNC Financial Services Group said the August numbers are in line with the “soft landing” the U.S. Federal Reserve Bank has sought rather than an economic recession. But Faucher said a recession could still occur in early 2024, if there is a delayed reaction to the Fed’s interest rate hikes.

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