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Dip in average work week may keep Janet Yellen from hiking, says Art Cashin

Economists and market watchers are debating whether a disappointing August jobs report is enough to keep the Federal Reserve from raising rates this month, but Art Cashin said the decision might boil down to one figure.

Beyond the headline figure of 151,000 new positions in August, a number of details signal there is trouble brewing in labor markets, according to Cashin, UBS' director of floor operations at the New York Stock Exchange. The one that troubles him the most is a drop in the average number of hours worked, he told CNBC's "Squawk Alley" on Friday.

The average work week for private sector employees fell by 0.1 hours to 34.3 hours in August, the Labor Department reported. The decline was slightly wider in the manufacturing sector, where the average hours worked was down 0.2 percent to 40.6.

The data point might not normally garner much attention, but Cashin said he believes Fed Chair Janet Yellen will look very strongly at last month's figure due to her background as an employment economist.

"While it was fractional given the number of people in the workforce, that wipes out far more than the [151,000] jobs that were added as far as productivity is concerned. That's equivalent to at least a drop of 200,000 jobs," he said.