US Adds 162,000 Jobs in August, Surpassing Expectations and Holding Fed Rate Hike Prospects

The US labor market added 162,000 non-farm payroll jobs in August 2026, up sharply from economists’ expectations of about 53,000 to 56,000 and following a revised loss of 23,000 jobs in July ^{[1, 2, 3]}. The unemployment rate remained steady at 4.1% for the month ^{[1, 2, 3]}.

The report showed robust gains in several sectors. Restaurants and bars led hiring with 59,000 new jobs, while the local government education sector added roughly 42,000 jobs. The healthcare sector posted an increase of between 12,000 and 13,000 positions, and the construction sector added 22,000 jobs ^{[1, 3]}.

However, some sectors contracted. The information technology sector lost 23,000 jobs in August, continuing an average monthly decline of about 8,000 jobs over the past year. The financial activities sector fell by 12,000 jobs ^{[1, 3]}.

Average wage growth slowed to 3.1% year-on-year in August, marking the slowest pace since the pandemic and running below inflation ^[1]. Meanwhile, job openings stayed relatively stable at 7.3 million in July, slightly above June’s 7.2 million, while separations declined to 5.1 million ^[3].

The strong employment gains surprised economists and raised expectations of a Federal Reserve interest rate hike in September 2026. The US dollar strengthened on September 4 following the release of the report, signaling market confidence in tighter monetary policy ahead ^{[1, 2, 3]}. Ray Attrill, head of FX strategy at National Australia Bank, said, “I think the market is getting a little bit more jittery about what might be forthcoming effectively, and potentially the intervention threat is still there.” He added that unless the Fed intervenes aggressively, the market probably won’t see a sustained move below 155 on the yen in the coming weeks ^[2].

The Labor Department released the August jobs report on September 4, confirming the robust payroll growth that changed market expectations from the prior month’s weakness ^{[1, 2, 3]}. Officials and investors will now closely watch the Federal Reserve meeting later this month for signals on near-term interest rate decisions.