Fed Rate Hike Expectations Rise Amid Strong US Job Growth

Strong US job growth in August has increased expectations that the Federal Reserve may raise interest rates at its upcoming September meeting.

The US Labor Department reported on Friday that non-farm payrolls rose by 162,000 in August, exceeding forecasts of 55,000. The three-month moving average of payroll additions also increased to 71,000 after upward revisions to the previous two months.

Despite the strong job numbers, market strategists note that upcoming economic indicators will dictate the central bank's next move. The Consumer Price Index (CPI) release on September 11 is expected to show a 0.4 percent monthly increase in headline August CPI and a 0.2 percent rise in the core index.

Fed officials have emphasized price stability, but economists warn that if inflation fails to show sufficient progress, their rhetoric will need to be backed by action.