The U.S. added 162,000 jobs in August, the Labor Department reported Friday, a much-stronger-than-expected result that suggested the labor market shook off its early-summer doldrums.
The numbers
The unemployment rate stayed steady at 4.1%. That leaves it at a historically low level that indicates the labor market remains generally healthy.
Economists polled by The Wall Street Journal had forecast the report would show the economy gained just 53,000 jobs. The unemployment rate was in line with their expectations.
What this means for jobs
The jump in jobs came in part from rebounds in restaurant and in local-education employment that many economists viewed as one-off factors. But the U.S. has added an average of 80,000 jobs a month so far this year, which compares with monthly growth of 10,000 jobs in 2025.
“We don’t have a problem in the labor market,” said Joe Brusuelas, chief economist at RSM.
Hiring had weakened considerably in June and July, and so the August job gains helped dispel concerns that the labor market had re-entered a period of cooling.
Still, workers’ pay has been lagging behind inflation, raising concerns that consumer spending could be challenged in the months ahead.
What this means for the Fed
Federal Reserve officials had already made clear that inflation data, more than anything else, would help them decide whether or not to raise rates at this month’s meeting.
Even if the strong August employment report doesn’t change that calculus, it does remove an objection to raising rates.
Had August been weak, there might have been a better argument against tightening: Why raise rates into a labor market that’s not showing any strength? That argument isn’t available after Friday’s employment report.
The Labor Department’s consumer inflation report comes out next Friday.
President Trump, in a post on Truth Social, said it was time for the central bank to lower rates. “The Fed Board, with its great new leader, must get smart – BE PATRIOTS for a change,” he wrote.
How markets are reacting
Investors upped their expectations for a rate hike at the next Fed meeting. The 2-year yield, which often rises and falls with traders’ expectations for short-term rates set by the central bank, was up.
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