Country adds 162,000 jobs as unemployment stays at 4.1%

Job growth rebounds sharply

August recorded the strongest monthly job growth since March, marking a major improvement from July. July’s figures were revised to show a gain of 21,000 jobs instead of the previously reported loss of 23,000.

June’s employment figures were also revised higher, with 31,000 jobs added instead of the earlier estimate of 20,000. Economists had expected only 65,000 new jobs in August and predicted unemployment would rise to 4.2%.

Some industries lead hiring

The latest figures suggest that the US labour market remains stable despite several economic pressures. These include an ageing population, rapid use of artificial intelligence, higher oil prices, policy uncertainty and the war with Iran.

However, job growth remains uneven, with most new positions coming from a limited number of industries. This means the stronger employment figures are not being felt equally across the entire labour market.

Healthcare and social assistance added 28,400 jobs during the month. Local government education also gained 41,900 positions after losing 57,500 jobs in July.

Leisure sector sees major increase

Leisure and hospitality became one of the biggest sources of new jobs in August, adding 62,000 positions. The sector had lost 21,000 jobs in July and 54,000 in June, making the latest increase a significant turnaround.

Restaurants and bars accounted for most of the sector’s growth, adding 59,200 jobs. Employment in this area is closely watched because consumer spending plays a major role in supporting businesses across the US economy.

Wage growth reaches five-year low

Despite the strong hiring figures, wage growth continued to slow in August. Annual wage growth fell to 3.1%, its lowest level in five years and below the overall inflation rate.

The stronger jobs report has reduced concerns about a possible collapse in the US labour market. However, economists warned that the increase may partly reflect a rebound after two weak months rather than the start of a lasting period of faster job growth.

“August’s pick-up in payrolls looks like payback after two very weak months and the reversal of a seasonal adjustment distortion to education jobs, rather than a sustainable shift to a faster growth rate,” economists for Pantheon Macroeconomics wrote Friday in a note to investors.

The report also affected financial markets as the two-year Treasury yield increased after the figures were released. The move reflected stronger expectations that the Federal Reserve may have more room to raise interest rates at its policy meeting later this month.

The 10-year Treasury yield also moved slightly higher. Stock futures were mixed, with Dow futures down 150 points, or 0.28%, while S&P 500 futures fell 0.2% and Nasdaq 100 futures gained 0.15%.

The August jobs report shows a clear improvement after weak employment growth in June and July. However, the recovery is still uneven because a large share of new jobs came from only a few industries.

Slower wage growth could also affect household spending in the coming months. Markets are now watching the Federal Reserve closely because stronger employment could influence its next interest-rate decision.

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