Fed Faced with Toughest Rate Decision in Months Amid Labour Market Resilience

The US Federal Reserve may face a tougher decision on interest rates in September after the August jobs report showed stronger-than-expected growth, according to ICICI Bank Research.

The non-farm payrolls increased by 162,000 in August, well above expectations of 55,000, with gains led by leisure and hospitality and local government education.

The previous two months were also revised upwards by a combined 55,000, taking the three-month average to 71,000.

The unemployment rate remained unchanged at 4.1 per cent, while the labour force participation rate improved to 61.6 per cent from 61.4 per cent.

ICICI Bank Research noted that hiring was relatively broad-based, with employment gains in various sectors including food services and drinking places, construction, manufacturing, healthcare and education.