U.S. Adds 162K Jobs, Triple Forecast — SkimNews
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- U.S. employers added 162,000 jobs in August, more than triple what was expected and the biggest gain since March, while the unemployment rate held at 4.1%.
- June and July payrolls were revised up by a combined 55,000 jobs, flipping July from a reported 23,000-job loss to a 21,000-job gain and lifting the three-month average from 20,000 to 71,000.
- Local government education added 42,000 jobs in August, largely reversing July's decline, suggesting the summer's apparent weakness reflected seasonal volatility rather than a shift in labor demand.
- Bars and restaurants added a surprising 59,000 jobs despite the World Cup ending in July, and manufacturing added 16,000, while the information sector shed 23,000 jobs in August and 115,000 over the past year.
- The labor force participation rate rebounded to 61.6% as roughly 700,000 people entered the workforce last month and most found work, though it remains 0.7 points below a year ago.
- Federal Reserve Chairman Kevin Warsh said last week that "the labor markets are consistent with full employment," and with inflation in its sixth year above the Fed's 2% target, the August report adds ammunition for officials pushing for a rate hike.
- Next week's PPI (Thursday) and CPI (Friday) releases have become the deciding data for the Fed's September meeting, since economists can use them to estimate the PCE Price Index due September 30.
Why it matters: The Fed's September rate decision now hinges almost entirely on the inflation data due next week, not the labor market. With 162,000 jobs added, unemployment steady at 4.1%, and Warsh already calling the labor market consistent with full employment, Fed officials pushing for a hike have lost their last major excuse to wait — putting the burden of proof squarely on whether August's PPI and CPI show enough cooling to justify holding rates steady.
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