The latest jobs data provides a really confusing picture. Here are 4 things to know

The latest monthly report on the U.S. jobs market had been eagerly anticipated as a key gut check on the health of the economy. Unfortunately, it delivered a mixed picture that doesn’t offer clear conclusions about where things stand.

Overall, the data out on Friday suggests that hiring has slowed from earlier this year, but not as sharply as some had feared a month ago.

It’s a somewhat cloudy combination that policymakers at the Federal Reserve will need to sort through as they decide how aggressively to cut interest rates later this month.

Here are four takeaways from the jobs numbers for August.

The job market looks stronger in August than the month before

U.S. employers added 142,000 jobs in August — a marked increase from the 89,000 jobs created in the previous month.

Meanwhile, the unemployment rate dipped to 4.2%. That was a relief after the rate had unexpectedly jumped to 4.3% in July, sparking fears about the labor market — and the broader economy.

Much of the increase in July’s unemployment rate was the result of temporary layoffs, and many of those people went back to work in August.

Hiring last month was concentrated in hospitality (34,000 jobs), health care (31,000 jobs) and construction (34,000 jobs), while factories and retailers cut jobs.

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But the job market looks weaker in August than earlier this year

While employers added more jobs in August than they did in July, the overall pace of hiring has been slowing down.

Last month’s job gains were about 30% below the average of the previous twelve months. What’s more, job gains for June and July were revised down by a total of 86,000 jobs.

That’s consistent with other reports, including one showing fewer job openings by employers in July. And while the unemployment rate dipped in August, it’s still up half a percentage point from the beginning of the year.

Stock markets dropped as investors took the glass half-empty stance, especially after employers created fewer jobs than economists had expected in August.

Wages are rising faster than prices

A slowing labor market compared to earlier this year may not be encouraging news for job seekers, but for people currently employed there was good news: Average wages in August were up 3.8% from a year ago.

Wage gains have been outpacing inflation for over a year now, and that trend likely continued last month. (August inflation figures will be released next week.)

That means workers’ real buying power is increasing, helping to offset the big price hikes of previous years.

No clear signal for the Federal Reserve

Unfortunately for policy makers, Friday’s mixed labor report doesn’t provide clear signals for how to proceed.

The Fed has clearly indicated it plans to cut interest rates when policymakers gather on Sept. 17-18, and the central bank has been keeping a close eye on the job market as it weighs how much to actually cut them.

But Friday’s report doesn’t provide too much clarity. The dip in the unemployment rate suggests that the central bank can move slowly, trimming interest rates by a modest 0.25 percentage points.

But the downward revision in job growth in June and July might suggest more aggressive action — perhaps a half-point rate cut.

That’s the challenge with being “data dependent,” as Fed policymakers like to describe themselves. Sometimes the data point in different directions.