U.S. added 162,000 jobs in August, well above forecasts

WASHINGTON, Sept 4 (Reuters) - U.S. job growth accelerated sharply in August while the unemployment rate held steady at 4.1%, suggesting an improvement in the labor market after recent struggles, keeping an interest rate increase from the Federal Reserve this month on the table.

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WASHINGTON, Sept 4 (Reuters) - U.S. job growth accelerated sharply in August while the unemployment rate held steady at 4.1%, suggesting an improvement in the labor market after recent struggles, keeping an interest rate increase from the Federal Reserve this month on the table.

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Job gains averaged 71,000 per month in the three months through August compared to a loss of 9,000 over the same period in 2025.

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Overall government payrolls rebounded by 35,000, and together with the leisure and hospitality sector accounted for more than 60% of the gain in employment.

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Payroll estimates for August ranged from as low as a loss of 25,000 jobs to as high as a gain of 121,000.

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That was, however, slower than the average monthly gain of 32,000 over the last year, and could reflect the revocation of Temporary Protected Status for hundreds of thousands of Haitian immigrants, which impacted their work permits.

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Professional and business services payrolls rose 10,000.

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The average workweek lengthened to 34.4 hours, the longest since March 2024, from 34.3 hours in July.

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Rising yields drove the 30-year fixed mortgage rate to a more than one-year high of 6.71% this week, data from mortgage finance agency Freddie Mac showed on Thursday, which could further undermine a struggling housing market.

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The median duration of unemployment increased to 11.4 weeks, not too far from a 4-1/2-year high touched in May.

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It remained below 62.1% at the start of the year.

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It was up from 10.5 weeks in July.

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The U.S. economy rebounded in August, adding jobs at a solid pace after a surprise decline in July amid economic uncertainty.

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Private payrolls added 127,000 jobs in August, well above the gain of 45,000 that was estimated by LSEG economists.

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July's growth in private payrolls was revised up from a gain of 30,000 to 71,000.

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Local governments added 50,000 jobs, including 42,000 education roles, which more than offset declines in government employment at the federal (-5,000) and state (-10,000) levels.

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Government payrolls added 35,000 jobs in August, with the sector's loss of 53,000 jobs in July revised to a loss of 50,000 jobs.

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The sector's gain of 5,000 jobs in July was also revised up to 14,000.

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Most of the losses occurred in computing infrastructure providers, data processing, web hosting and related services (-8,000), as well as in publishing (-7,000) and in broadcasting and content providers (-5,000).

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Within the sector, home healthcare services (+11,000) and hospitals (+8,000) added jobs.

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The long-term unemployed accounted for 27% of all unemployed people last month.

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The employment-population ratio was 59.1% last month, having changed little this year.

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The payrolls number also slightly increased market odds for a September rate hike by the Federal Reserve, however most market watchers still believe that next week’s inflation report will prove to be pivtol.

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The Fed is widely expected to raise rates before the end of the year due to rising energy prices as a result of the wars in Iran and Ukraine and continued trade tensions.

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That law permanently extended many temporary provisions of a 2017 measure pushed by Trump during his first administration.

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The inflation rate in July was 3.4% from a year ago, but that was before energy prices started climbing again.

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In that sector specifically, the Bureau of Labor Statistics said that job losses occurred at companies that provide computing infrastructure, data processing and web hosting.

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On Friday, the international crude oil benchmark Brent traded around $95 per barrel.

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Since Aug. 4, the price of Brent has risen nearly 20%.

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August’s number is likewise not reflective of job growth writ large this year, which is tracking at about 80,000 roles per month.

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That’s well above 2025’s monthly average of 10,000 jobs, but below the monthly means for 2023 and 2024.

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They typically stem from fresh data the agency receives from businesses about their hiring and payrolls that arrives too late to be included in that month’s initial reading.

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That’s up from the original estimate of 20,0000.

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Industries such as healthcare and social assistance (+28,400) continued to add jobs while local government education (+41,900 jobs) reversed a large loss from July (-57,500).

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Industries such as healthcare and social assistance (+28,400) continued to add jobs while local government education (+41,900 jobs) reversed a large loss from July (-57,500).

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If the index is above 50, that means more industries added jobs than lost them.

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The percentage of unemployed workers who have been job-hunting for 15 weeks or more rose to 43% in August, a five-year high.

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Monthly economic data usually is quite volatile; however, the jobs reports this year have delivered a whipsaw effect (the biggest being a 370,000-job swing from February to March).

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It’s expected to show that prices rose 0.4%, keeping the annual rate at 3.4%, according to the Federal Reserve Bank of Cleveland’s inflation “nowcast.” Excluding the volatile food and energy categories, prices are likely to rise 0.2%, slowing the annual core rate of inflation to 2.3%, according to the Cleveland Fed.

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The U.S. has a deficit with more than 90 nations.

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Policymakers generally watch the unemployment rate more closely for the health of the labor market, and that has held consistent for the past several years and is actually down 0.2 percentage point from a year ago.

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An alternative measure of unemployment that counts discouraged workers and those holding part-time jobs for economic reasons fell to 7.7%, down 0.2 percentage point to its lowest level since June 2025.

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Average hourly earnings rose 0.3%, in line with the consensus, while the annual increase of 3.1% was 0.1 percentage point ahead of expectations.

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The FOMC has not adjusted the federal funds rate since three cuts in the latter part of 2025.

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Payroll gains in August were more than five times the monthly average for the last 12 months, which is 31,000, according to the Labor Department.

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The data comes in sharp contrast to the ADP national employment report, which tracks private payrolls and found 38,000 jobs added across the US economy.

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Meanwhile, the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) report released on Tuesday revealed job openings were slightly changed, with 7.3 million in July, up from 7.2 million the previous month, while total separations fell to 5.1 million in July from 5.3 million in June.

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The Canadian economy lost 41,700 jobs, according to Statistics Canada, with the unemployment rate holding steady at 6.4 percent.

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