The US labor market added 162,000 jobs in August, blowing past economists’ expectations, and the unemployment rate held steady at 4.1%.
The gains came largely from a rebound in leisure and hospitality and local government, after declines in both over the summer. The stronger-than-expected numbers have fed funds futures traders betting on a Federal Reserve rate hike this month, as the data points to a resilient labor market alongside inflation still above the Fed’s 2% target. Chances of a 0.25-point rate hike in September rose 11 points, per CME Fedwatch. The US releases fresh inflation data next week, another key input for the Fed.
Economists tempered optimism about the report. “The labor market is steady, but that is not a relief to job seekers,” Kory Kantenga, LinkedIn’s head of Americas economics, told Semafor.