STORY: The closely-watched U.S. jobs report out Friday showed that businesses added fewer jobs than expected in August, while the unemployment rate ticked down from the prior month.
Nonfarm payrolls increased by 142,000 jobs, according to the Labor Department, less than economists polled by Reuters had expected.
But the unemployment rate, which had risen for four straight months, nudged lower to 4.2%.
The data suggested the Federal Reserve had a green light to begin a round of interest rate cuts later this month, as the central bank looks to keep inflation at bay while not causing too much of a labor market slowdown.
One chief economist told Reuters that, because the report showed the labor market cooling at a "measured pace," the Fed will likely cut interest rates by a quarter-point.
Financial markets on Friday priced in about a 60% chance of a quarter-point rate cut by the Fed, and about a 40% chance of a larger, half-point cut.
The August employment report showed job gains last month were led by the construction sector, followed by healthcare jobs.
Average hourly earnings also increased slightly more in August than they had in July.
Still-solid wage growth continues to underpin the economy by boosting consumer spending, which accounts for more than two-thirds of U.S. economic activity.
