Slower US payrolls growth dims September Fed rate hike prospects

When it raised rates last month, the Fed expressed confidence that inflation would pick up before long. But most analysts, even the ones more optimistic about growth, remain skeptical that will happen. (Picture shows the US Fed building)

"It reduces the likelihood that the Fed will raise rates in September, but the labor market remains strong enough to support a rate hike in December," said John Silvia, chief economist at Wells Fargo Securities in Charlotte, North Carolina.