The Economy Added 162,000 Jobs in August. Forecasters Had Penciled In 53,000.
The Labor Department also erased July's reported job losses, revising the month from a 23,000 decline to a 21,000 gain. Wages are still running behind inflation.
American employers added 162,000 jobs in August, roughly three times what Wall Street expected, and the unemployment rate held at 4.1%. Economists surveyed by Dow Jones had forecast hiring of just 53,000 after a summer of weak and repeatedly downgraded numbers. Friday's release from the Bureau of Labor Statistics did not just beat the forecast. It also rewrote the two months before it.
July, originally reported as a loss of 23,000 jobs, was revised up by 44,000 to a gain of 21,000. June was revised up by 11,000 to a gain of 31,000. That is a swing of 55,000 jobs that the government had previously told the country did not exist, and it turns the picture of a labor market sliding backward through the summer into one that was merely crawling.
The hiring was concentrated in a narrow set of industries. Restaurants and bars added 59,000 jobs, the single largest contributor. Local government education added 42,000. Construction added 22,000. The information sector, which covers software, telecommunications and media, lost 23,000 jobs and has been shedding workers for most of the year as companies restructure around artificial intelligence.
The part of the report that did not improve was pay. Average hourly earnings rose 3.1% from a year earlier, unchanged from July and below the 3.4% annual inflation rate recorded in July. That gap means the typical worker's paycheck bought less in August than it did a year ago, and rising energy prices are expected to widen it. Diesel and gasoline costs have been climbing through the late summer.
"August's blowout jobs report provided evidence of a stable labor market," said Jennifer Timmerman, an investment strategy analyst at Wells Fargo, who pointed to the room it gives consumers to keep spending. She called wage stagnation "the fly in the ointment."
The political reaction was immediate. Kevin Hassett, director of the National Economic Council, called the report a "blockbuster" and credited the administration's tax policy, arguing that forecasters' models need rebuilding. President Donald Trump called the numbers "great" and repeated his demand that the Federal Reserve cut interest rates immediately.
The Fed is unlikely to oblige. A labor market adding jobs at this pace removes the main argument for easing, and traders nudged up the odds of a rate increase before the end of the year after the release. Inflation, not employment, is now the binding constraint on the central bank, and officials have said as much through the summer. The next consumer price reading, due September 11, will matter more to that decision than anything in Friday's report.
For households, the two halves of the report point in opposite directions. Jobs are easier to find than economists thought a month ago. The pay attached to them is still losing ground to prices.
Originally reported by NBC News.