US Jobs Rebound in August, Wage Growth Lags Behind
US jobs rebounded in August with a significant increase of 162,000 payrolls, according to the Bureau of Labor Statistics. This marks the strongest monthly increase since March and reverses a summer slowdown in hiring.
The unemployment rate remained steady at 4.1%, in line with expectations. Economists had predicted a much lower increase of 53,000 jobs, making this report a welcome surprise for the market.
However, not all is rosy in the labor market. Average hourly earnings for all employees on private nonfarm payrolls rose by only 10 cents, or 0.3%, to $37.75. This represents the lowest wage growth in five years.
The August jobs report may complicate expectations around the Federal Reserve's policy path, particularly with inflation remaining above the central bank's 2% target. Next week's Consumer Price Index report is likely to play a decisive role in determining whether interest rates will be raised this month.