Unemployment Rate Falls to 5.4%, Lowest in 3 Years

WASHINGTON – U.S job growth snapped back in August after two disappointing months, as nonfarm payrolls climbed by 144,000, the Labor Department estimated Friday.

The unemployment rate fell 0.1 percentage point to 5.4 percent, the lowest rate since October 2001, primarily because 152,000 adults dropped out of the labor force.

Payroll additions in June and July were revised higher by a cumulative 59,000. July’s gain was revised to 73,000 from 32,000. Read the full release.

Economists surveyed by CBS MarketWatch were expecting job growth of about 158,000, close to the 177,000 average for the first seven months of the year. See Economic Calendar.

“A solid but not spectacular report,” said Drew Matus, an economist for Lehman Brothers.

Bonds fell on the news, focusing on upward revisions, the drop in the jobless rate and the slight acceleration in earnings. U.S. stocks recorded modest gain at the opening. See Market Snapshot.

Since August 2003, the economy has created 1.7 million jobs, after losing about 2.7 million during the recession and recovery. The unemployment rate has fallen from 6 percent to 5.4 percent.

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