Job Growth Slows in August as Labor Force Shrinks

Alan Diaz/AP

By Lucia Mutikani

WASHINGTON -- Job growth in the U.S. slowed down sharply in August and more Americans gave up the hunt for work, giving a cautious Federal Reserve more reasons to wait a bit longer before raising interest rates.

Nonfarm payrolls increased 142,000 last month, the smallest increase in eight months, the Labor Department said Friday. The unemployment rate fell one-tenth of a percentage point to 6.1 percent as people dropped out of the labor force.