Surprise Jobs Report Triggers Rate Hike Expectations

Financial markets wobbled Friday after a surprisingly strong jobs report raised prospects of an interest rate hike by the Federal Reserve. The Labor Department reported that employers added 162,000 jobs in August, far exceeding the 65,000 forecasters expected.

The unexpected hiring could give the Fed leeway to raise its benchmark short-term interest rate to fight inflation when central bank policymakers meet later this month. According to Terry Sandven, chief equity strategist at U.S. Bank Asset Management Group, 'Today's jobs report does lean toward the Fed increasing rates.'

The S&P 500 fell 0.5%, while the Dow Jones Industrial Average was down 282 points, or 0.5%. Gains in technology stocks helped limit declines in other sectors.