August jobs report shows U.S. added 162,000 jobs, more than double economists' forecasts
U.S. employers added 162,000 jobs in August, more than double economists' forecasts and signaling a sharp acceleration from hiring in July.
By the numbers
Economists polled by FactSet forecast employers added 65,000 jobs in August.
The unemployment rate was 4.1% in August, unchanged from the previous month.
Hiring in August was boosted by job gains in food services and bars as well as local government education. Those sectors added 59,000 and 42,000 jobs, respectively. Payroll gains in August were more than five times the monthly average for the last 12 months, which is 31,000, according to the Labor Department.
"What a 'wow' jobs report," said Heather Long, the chief economist at the Navy Federal Credit Union, in an email. "The hiring rebound in education was expected as teachers head back to work, but it was encouraging to see the bounce back in hospitality as well, especially restaurants."
The Labor Department also revised payroll gains up by a total of 55,000 in June and July, indicating that hiring was slightly stronger than expected during those months. Accounting for revisions, employers added 21,000 jobs in July, up from initial estimates showing the U.S. shedding 23,000 jobs.
The U.S. labor force — the number of people working or actively looking for work — increased by 683,000 last month after falling in June and July.
Although job creation accelerated in August, wage growth remained sluggish at 3.1%, the lowest since May 2021.
"It's the lowest in five years and well below inflation," Long said. "Many workers are financially squeezed right now."
What does this mean for interest rates
The August jobs report could strengthen the case for a Federal Reserve interest rate hike at the central bank's upcoming meeting, with the rate decision set for Sept. 16, economists said on Friday. However, the Fed is likely to place more emphasis on the forthcoming Consumer Price Index report, which will be released on Sept. 11.
"An upside surprise in payrolls will likely ramp up concerns about a rate hike, but that outcome is in the hands of next week's inflation numbers," Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, said in an email. "If those come in cooler than expected, the Fed will likely feel comfortable discounting potentially inflationary signals coming out of the labor market."
Federal Reserve Chair Kevin Warsh affirmed that the labor market was on a steady course last week during the Fed's annual conference in Jackson Hole, Wyoming.
"There are always areas of concern in the labor market—for example, among recent graduates," he said. "In general, though, people who want to work, by and large, are holding or finding jobs."
Warsh signaled that inflation, which is stubbornly above the Fed's 2% target, remains the central bank's primary focus. The Fed will have "work to do" if price pressures do not ease, he said at the Jackson Hole conference.
