The United States economy added jobs at a much faster pace than expected in August, reversing a summer slowdown in hiring and increasing market expectations for a potential Federal Reserve rate hike this month.
Nonfarm payrolls rose by a seasonally adjusted 162,000 last month, according to the Bureau of Labor Statistics. The reading was well above the 56,000 increase expected, while the unemployment rate held steady at 4.1%, in line with forecasts.
August's increase was the strongest monthly gain since March and broadly consistent with the Federal Reserve's assessment of a stable labour market.
The stronger-than-expected report prompted traders to raise bets on a rate increase at the Fed's 15-16 September policy meeting.
Markets were pricing in around a 58.3% probability of a 25-basis-point hike, according to the CME Group FedWatch Tool.
President Donald Trump described the report as a "great jobs number" but called on the Fed to lower interest rates.
“The Fed Board, with its great new leader, must get smart - BE PATRIOTS for a change,” Trump said in a post on Truth Social.
“High interest rates put the U.S.A. at a very unfair disadvantage, and I won’t allow that to happen!”
Trump also threatened to halt trade with countries where the U.S. runs a trade deficit unless the Fed cuts interest rates.
“LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT, which the U.S. Supreme Court, in its ridiculous and very costly Tariff decision, strongly acknowledged ‘the President’ has an absolute right to do,” Trump wrote.
The unemployment rate has remained relatively stable in recent years and is 0.2 percentage point lower than a year ago.
The labour force participation rate increased by 0.2 percentage point in August, while the household survey showed employment rising by 569,000 and the labour force expanding by 683,000.
Previous months were also revised higher. July payrolls were revised to a 21,000 increase from an initial 23,000 decline, while June was revised to a 31,000 gain, an upward adjustment of 11,000.
Job creation was relatively broad-based in August. Restaurants and bars added 59,000 positions, government education gained 42,000, and manufacturing added 16,000.
Healthcare employment rose by 13,000, well below its average monthly gain of 32,000 over the previous 12 months.
Information-related industries lost 23,000 jobs, raising concerns that increased investment in artificial intelligence could be contributing to employment losses. The sector has averaged a monthly decline of 8,000 jobs over the past year.
Average hourly earnings increased 0.3% for the month, matching expectations, while annual wage growth accelerated to 3.1%, 0.1 percentage point above forecasts.
