WASHINGTON, Sept. 6 (Xinhua)-- The U.S. nonfarm payrolls rose less than expected in August and unemployment rate ticked down 0.1 percentage point as more people dropped out of the labor force, complicating the Federal Reserve's plan to start pulling back its support for the economy.
Jobs report from the Labor Department on Friday showed that the economy added 169,000 jobs, falling short of the 175,000 jobs economists had expected.
The government also revised down its estimate for the hiring growth in June and July by a combined 74,000 jobs, adding another discouraging sign. U.S. employers have added an average of 148,000 jobs in the past three months, far below the 12-month average of 184,000.
The jobless rate inched down to 7.3 percent, hitting the lowest level since December 2008. But the share of Americans working or looking for jobs slipped further in August from 63.4 percent to 63. 2 percent. Those discouraged people were no longer counted as unemployed. In fact, the total number of the employed dropped by 115,000.
"The decline in the unemployment rate isn't due to folks getting jobs; instead, it's due to people dropping out of the labor force," said Justin Wolfers, senior fellow with the Brookings Institute.
As a lingering scar from the recession, the number of long-term unemployed who have been out of work for over six months was little changed at 4.3 million.
"Private sector employment has risen for 42 consecutive months, with businesses adding a total of 7.5 million jobs over that period," said Jason Furman, chairman of the Council of Economic Advisers.
It is important not to read too much into any one monthly report which can be subject to substantial revision, nevertheless, incoming economic data broadly suggested that the recovery continued to make progress, he said in a statement.
A DATA-DRIVEN FED
August's jobs report was the last monthly snapshot of the labor market the Fed officials will see before their Sept. 17-18 policy meeting. They are expected to debate on whether to start tapering its 85-billion-dollar monthly bond-purchase program, dubbed QE.
Fed chairman Ben Bernanke said in June that the central bank would begin reducing its bond purchases by the year end if the U.S. economy continues to grow as expected and end the purchases by mid- 2014.
Top Fed officials have indicated that the decision on monetary policy will hinge on the health of the economy and the prospects of the labor market. However, recent data have been mixed. The second quarter growth rate was revised up but home sales fell and growth of personal consumption expenditure slowed.
The current 7.3 percent jobless rate was only 0.3 percentage point higher than the 7 percent level that the Fed estimated the economy would reach when it ends its asset purchases by the middle of next year.
Wolfers said the most important of August jobs report was "the revisions to what we had previously thought was a healthy and perhaps self-sustaining recovery."
"Until we're confident that the recovery will keep rolling on, we should delay either any monetary tightening, further fiscal cuts, and definitely postpone the legislative shenanigans that Congress is threatening," he added.
Some analysts say the slow but steady hiring may not sway the Fed as its officials would recalibrate policy on their expectations of how the economy will evolve in the future, which they seem cautiously optimistic.
Minutes of the Fed's latest policy meeting showed Fed's top officials generally agreed on a tapering later this year while some still wanted to see more evidence of economic strength.
Esther George, president of the Federal Reserve Bank of Kansas City and a critic of the stimulus effort, said Friday that it would be appropriate for the Fed to decide to trim the monthly bond purchases at its September meeting, and that the initial reduction would be around 70 billion dollars.