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Jobs surge, inflation focus
U.S. employers added 162,000 jobs in August and kept the unemployment rate at 4.1 percent, according to the Labor Department data released Friday.
“The unemployment rate remained at a low 4.1%.”
The hiring burst far exceeded the 65,000 jobs forecasters expected, with Labor Department revisions adding 55,000 to June and July payrolls after July was revised to a gain of 21,000 from a previously reported loss of 23,000.
Restaurants and bars led the month with 59,000 jobs, while construction added 22,000 and manufacturing added 16,000, as the report shifted attention back to inflation.
President Donald Trump celebrated the jobs number and urged rate cuts, writing, "Great jobs number just announced, breaking all estimates (except mine!) by double and triple - And you haven’t seen anything yet!"
The AP framing tied the strong labor market to the Fed’s next steps, noting that "inflation has dominated conversations this year in business and households."
Fed debate and market reaction
While the White House cast the report as proof that President Donald Trump’s manufacturing agenda is taking hold, NBC News reported that wage growth continued to lag inflation, with wage growth at 3.1% year-over-year in August.
NBC News quoted Wells Fargo’s Jennifer Timmerman calling wage growth "the fly in the ointment," and said the report raised expectations for a near-term Fed rate hike amid "unacceptably high inflation."
Reuters reported that the dollar jumped after the jobs data, with the dollar index rising to 99.17 and the euro down to $1.1611, as markets boosted bets on a September Federal Reserve interest rate hike.
Reuters also said Fed policy and inflation data were in focus, with Noel Dixon arguing, "I don't think this number changes anything really," pointing ahead to next week’s inflation reading.
The Washington Post said the Fed would likely look closely at next week’s inflation numbers and warned that decelerating wage growth could be a dark spot, even as Trump pushed the Fed to lower rates.
What comes next for workers
The next inflation data is scheduled for Sept. 11, and the Fed’s next interest-rate decision is set for Sept. 16, as multiple outlets tied the jobs report to the timing of monetary policy.
“The department’s next inflation report due out Sept. 11”
USA Today reported that the department’s next inflation report due out Sept. 11 will test whether paychecks kept up with inflation, while noting that average hourly earnings for private, nonfarm payrolls rose 10 cents to $37.75 in August.
Reuters said economic data for August is seen as key to whether the Fed will hike at its September 15-16 meeting, and it quoted Dixon again that markets would react to the core CPI number next week.
At the same time, AP highlighted that average hourly wages rose 3.1% last month from a year earlier, described as the weakest year-over-year increase since May 2021, and it pointed to inflation pressure from fuel prices.
CNN added that the labor market’s “low-churn” dynamic left many people on the outside looking in, with the percentage of unemployed workers job-hunting for 15 weeks or more rising to 43% in August.