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Solid Aug. Job Gain Shows Momentum, But Strains Coming; Hurricane Dampens Outlook; Tight oil, lost jobs suggest slower 2nd-half GDP rise; Fed hikes less likely now.(A)

Investor's Business Daily

| September 06, 2005 | COPYRIGHT 2005 Investor's Business Daily, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Byline: LAURA MANDARO

Job growth remained strong in August, providing the economy with a firm footing for what's increasingly likely to be a tougher few months following Hurricane Katrina's destruction.

Nonfarm payrolls rose 169,000, below estimates for 190,000. But June and July jobs were revised higher by a combined 44,000.

Significantly, the jobless rate fell to 4.9%, the lowest in four years.

"The labor market has some forward momentum, and it's going to need it because we're going to be hit with some strong headwinds in next month's jobs report," said Michael Gregory, senior economist for BMO Nesbitt Burns.

By "headwinds," read Katrina.

The 140-a-mile per hour hurricane slammed the Gulf Coast and flooded New Orleans, leaving the city uninhabitable for months. More than 1 million Gulf residents may be homeless.

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