US employers added 142,000 jobs last month, the labor department announced on Friday, in one of the year’s most closely watched economic news releases.

The release comes as the US Federal Reserve prepares to cut interest rates for the first time since March 2020, and November’s election puts a spotlight on the state of the US economy.

The reading for August was shy of the average forecast increase of 163,000 jobs by economists surveyed by Bloomberg.

The headline unemployment rate also decreased from 4.3% to 4.2%, in line with expectations.

The economy is ranked as one of the most important issues heading into November’s presidential election, amid significant unease over its strength. Donald Trump led Kamala Harris by 3% in a recent Reuters/Ipsos poll on the candidates’ approaches to the economy and employment.

Last month, the US Bureau of Labor Statistics made a significant revision, lowering the number of job created in the 12 months to March by 818,000, or 0.5%, the largest revision since 2009. The revision tapered job increase reports to about 174,000 jobs per month added, compared to the previously reported rate of about 242,000 jobs per month.

The revision came amid signs that the jobs market is weakening. On Wednesday the Labor Department reported that the number of job openings has fallen to its lowest level in three and a half years.

Fed chair Jerome Powell recently signaled plans to reduce interest rates when the central bank holds its next meeting on 17 and 18 September, declaring that “the time has come” for the central bank to act.

“The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” he said.

Two years ago, when inflation was soaring during the pandemic, policymakers at the Fed scrambled to cool the US economy by raising rates to a two-decade high. Now price growth is falling back – it rose at an annual rate of 2.9% in July, having faded from a peak of 9.1% in June 2022 – they are preparing to cut rates, but have yet to do so.

Officials hope to guide the US to a so-called “soft landing”, whereby inflation is normalized, and recession avoided. The Fed’s target of inflation is 2%.

In recent months, critics of the Fed have accused the central bank of sitting on its hands and derailing the US economy, amid unease over its direction. An unexpectedly weak jobs report for July, which came a day after the Fed again chose to hold rates steady, sparked a fleeting global sell-off.