US employers added 162,000 jobs in August, a much stronger gain than forecasters expected and a clear rebound after a weak July. The Labor Department released the figures Friday morning, and the unemployment rate held steady at 4.1 percent.
Better than expected
Economists surveyed by Bloomberg had expected only about 55,000 new jobs last month. The August report also came with revisions: the government raised its employment counts for June and July by a combined 55,000 jobs, which points to a labor market with more momentum than earlier data suggested. Layoff announcements also slowed. Outplacement firm Challenger, Gray & Christmas recorded about 53,000 planned cuts in August, the slowest August for layoffs since 2022.
Where the jobs came from
Hiring was strongest in healthcare and hospitality. Factories and construction companies also added workers. Initial jobless claims ticked up slightly to 206,000, still a low level by historical standards. ADP chief economist Nela Richardson has described the current market as one that is 'cooling, not cracking,' and Friday's numbers support that view: growth is steady but no longer red-hot.
What it means for the Fed
The report landed days before the Federal Reserve's September meeting. After the data, investors raised the odds of a September rate increase to about 60 percent. Still, many economists say next week's inflation report, due September 11, will matter more for the Fed's decision than the jobs figures. 'Markets may edge up their expectations for a September hike following today's release, but next week's CPI report is still likely to be the key swing factor for policy,' said Seema Shah, chief global strategist at Principal Asset Management. Fed governor Christopher Waller has said he is inclined to leave rates unchanged unless the inflation data surprises. Fed leaders have said their next move depends on the data, and the jobs report together with next week's inflation figures will both feed into that decision.