US Jobs Report Boosts Rate Hike Odds Ahead of Inflation Data

The US economy added 162,000 jobs in August, exceeding all forecasts in a Bloomberg survey. The jobless rate remained steady at 4.1%, while July's job losses were revised away, indicating more momentum than previously assumed.

Despite the strong hiring numbers, the data does not indicate that the labor market is fueling new price pressure. Federal funds futures suggest investors now assign a 60% chance of a rate hike this month, up from roughly 50%, according to Vail Hartman of BMO Capital Markets.

The divide within the Fed remains, with most officials backing holding rates steady at their next meeting on September 16. Three officials argued for a quarter-point increase in July, while two non-voting policymakers later sided with them.