US Jobs Rebound in August: Fed Rate Hike Chances Rise

The US economy saw a significant rebound in August, adding 162,000 jobs and reversing a summer slowdown in hiring. The Bureau of Labor Statistics reported that nonfarm payrolls increased by more than expected, exceeding a gain of 53,000 predicted by economists surveyed by Dow Jones.

The unemployment rate held steady at 4.1%, in line with expectations. This marked the strongest monthly increase in employment since March and offered a more encouraging picture of the labor market after a period of weakening job growth.

However, wage growth was a sore spot in the August jobs report, with average hourly earnings for all employees on private nonfarm payrolls rising by just 10 cents, or 0.3%, to $37.75. Over the year, average hourly earnings have increased by 3.1%.

Financial markets initially reacted negatively to the stronger-than-expected employment numbers, with investors reassessing the likelihood of higher interest rates. The Dow Jones opened 187 points lower, or by 0.3%, while the S&P 500 declined 0.2%. Treasury yields moved higher across the curve.