US economy adds 128,000 jobs but global manufacturing cools

The data yesterday appeared consistent with a gradual cooling in the US and global economies.

Reuters reports the US data.

U.S. employers added 128,000 workers to their payrolls in August, evidence of a cooler -- but still solid -- pace of economic growth that could let the Federal Reserve hold interest rates steady.

The closely watched Labor Department report...showed the unemployment rate dipped to 4.7 percent from 4.8 percent in July, suggesting the job market remains sturdy...

Average hourly earnings rose a slim 2 cents, or 0.1 percent, last month...

In addition, the length of the average work week dipped by 0.1 hour to 33.8 hours...

Separately, the Institute for Supply Management said its index of factory activity slipped to 54.5 in August from 54.7 in July, showing continued growth at a slightly slower pace.

At the same time, the prices paid index fell to 73.0 from 78.5, a sign of receding price pressures.

Another report showed consumer sentiment falling in August, but by less than expected. The University of Michigan's sentiment index fell to 82.0 from 84.7 in July...

The Commerce Department said construction spending tumbled by 1.2 percent in July, the biggest drop since August 2001, as spending on homebuilding plummeted 2 percent.

At the same, the National Association of Realtors said its index of pending homes sales...plunged 7 percent in July to the lowest level in more than three years. The drop was the biggest on records dating to 2001.

Manufacturing also slowed just about everywhere else.

In the euro zone, the Royal Bank of Scotland Plc index fell to 56.5 in August, the lowest level in five months, from July's 57.4.

In the UK, the Chartered Institute of Purchasing and Supply/RBS Purchasing Managers' Index (PMI) slipped to 53.1 last month from 53.6 in July.

In China, the CLSA purchasing managers' index (PMI) slipped to a five-month low of 52.6 points in August, down from a 14-month high of 53.0 in July.

The JPMorgan Global Manufacturing PMI slipped to 55.1 in August from 55.5 in July. The output index fell to 55.8 from 57.7 while the new orders index fell to 55.4 from 56.8. Even the input prices index fell, to 69.8 from 73.1.

Commenting on the survey, David Hensley, director of Global Economics Coordination at JPMorgan, said:

The PMI indicates that growth of global manufacturing output and employment remained solid in August. There are however, signs of moderation in the report. The pace of new order growth has slowed significantly, while inventory build is relatively rapid. This combination has been a sure signal of weaker manufacturing activity in the past, and we look for global output growth to slow to a 3-4% annual rate in coming months.