WASHINGTON, Sept. 4 — The US economy added 162,000 jobs in August, surpassing economists’ expectations of around 150,000 and signaling that the labor market remains resilient even as growth cools and interest rates stay elevated. The bottom line: the better-than-expected figure lowers the odds of a near-term recession and gives the Federal Reserve room to weigh its next policy move when it meets. The unemployment rate remained at a historically low level, while wage growth showed signs of moderating — a development that should ease inflationary pressures.
The labor force participation rate held steady, consistent with recent months, and the underemployment rate, which includes part-time workers seeking full-time positions, edged down. The number of long-term unemployed remained stable.
By the numbers, hiring was led by healthcare, professional services and construction. Manufacturing and retail saw modest increases. The Bureau of Labor Statistics, which released the report, also revised June and July payroll figures down by a combined 20,000 jobs.
A gradual cooling
Investors will note that the August figure, while above expectations, marks a slowdown from the pace seen earlier in the year. The economy has added an average of about 150,000 jobs per month over the past three months, down from the 200,000-plus pace seen in the first half of the year. Analysts described the trend as a gradual cooling that aligns with the Fed’s goal of achieving a soft landing.
The strong job market has supported consumer spending, a key driver of economic growth, though it has also kept wage pressures elevated. Recent data, however, suggest a gradual easing of those pressures.
The report is based on a survey of businesses conducted in mid-August and is subject to revision. Some economists caution that the report could be affected by seasonal factors and the timing of the survey, and they await further data to confirm the trend.
What to watch
The figure that matters now is the Fed’s next move. Officials are balancing the need to control inflation against the risk of slowing growth, and markets anticipate a potential pause in rate hikes. The US economy, the world’s largest, has shown resilience in the face of tight monetary policy, with GDP growth remaining positive in the second quarter.
The August jobs report is a key indicator for the broader economic outlook, and its release is a major event in the financial calendar. The better-than-expected figure may reduce the likelihood of a near-term recession, but the downward revisions to prior months and the moderating wage data give policymakers cover to hold steady.
The Fed’s decision at its upcoming meeting will be the next signal investors watch.
