US Labor Market Rebounds with 162,000 New Jobs in August
The US labor market rebounded in August with a burst of 162,000 new jobs, exceeding the expected 65,000. The unemployment rate remained at 4.1%, and average hourly wages rose 3.1% from last year, but this is the weakest increase since May 2021.
Employers added more jobs than forecasted in August, ending a summer of slow hiring with a strong showing. Restaurants and bars added 59,000 jobs, construction companies 22,000, and manufacturers 16,000. Factory jobs are up by 58,000 since hitting a low in December.
KPMG's chief economist Diane Swonk called the report 'incredible' and a 'summer heatwave', while some economists remain skeptical about the sudden rebound. Thomas Simons of Jefferies wrote that the strong hiring may be more a result of payback from previous months rather than a sign of significant acceleration.
The Federal Reserve will likely take notice of this report, which could increase the likelihood of a rate hike when it meets on September 15-16. The focus will now shift to inflation reports, with Fed governor Christopher Waller leaning towards keeping rates unchanged but open to a hike if inflation is high.