The unemployment rate slid as expected in August after a surprise increase the prior month

• The unemployment rate fell to 4.2% in August.
• The US also added 142,000 jobs in August, below the forecast of 164,000.

Unemployment slid as expected to 4.2% in August after a surprise increase to 4.3% the prior month.

However, US nonfarm payrolls came in weak, with the economy adding 142,000 jobs, missing the consensus expectation of 164,000.

The unemployment figure solidifies outlooks for an economic soft landing and is unlikely to derail expectations for a Federal Reserve interest-rate cut later this month. Investors will instead be focused on the size and pace of those cuts.

"I think in general there's this perception that if we get a weak payroll report for the month of August that the Fed will proceed methodically with a 50 basis-point rate cut," Gregory Daco, EY's chief economist, told Business Insider earlier this week. "I don't necessarily agree with that perspective because I think, one, there's a majority of policymakers that are clearly in favor of a 25-basis-point rate cut to start the easing cycle."

Last month saw a surprise unemployment-rate increase for July and sizable nonfarm-payroll miss that renewed recession worries and sparked a sharp stock sell-off. Data later in the month stabilized outlooks, and equities rebounded.

Other recent data published Wednesday showed the job market has continued to see work opportunities slow. Job openings fell from 7.9 million in June to 7.7 million in July. More people quit a job in July than in June, with around 3.2 million quits in June compared to around 3.3 million in July. The layoffs and discharges rate also ticked up, from 1.0% in June to 1.1% in July.

That other labor-market data from earlier this week could also be important for the Fed's interest-rate decision.

"The labor market is past moderation and trending toward deterioration," Nick Bunker, the economic research director for North America at the Indeed Hiring Lab, said in commentary on Wednesday. "The Federal Reserve has indicated that it has shifted some attention away from inflation and toward the health of the labor market, which is good, but it needs to take action soon."

This is a developing story. Please check back for updates.