U.S. jobs growth rebounded sharply in August, offering new evidence that the labor market remains resilient despite inflation, elevated energy prices and broader economic uncertainty.
Employers added 162,000 jobs in August, according to data released Friday by the Bureau of Labor Statistics. The unemployment rate remained unchanged at 4.1%.
The increase marked a significant improvement from recent months and came in well above economists’ expectations.
Employment gains were particularly strong in food services and drinking places and local government education. The information sector, however, continued to shed jobs.
The labor force also expanded during the month. About 683,000 people entered or returned to the labor force, pushing the labor force participation rate to 61.6%.
Average hourly earnings increased by 10 cents during August. Wage growth remained moderate on an annual basis, providing some reassurance that rapidly rising labor costs are not adding substantially to inflation.
The stronger-than-expected jobs report could complicate the Federal Reserve’s next decision on interest rates. Investors had been looking for signs that slowing employment growth could give policymakers room to lower borrowing costs.
Instead, the August report renewed speculation that persistent inflation combined with a resilient labor market could keep interest rates elevated or even lead policymakers to consider another increase.
Treasury yields climbed and stocks fell after the report as financial markets adjusted expectations for the Fed’s September meeting.
The employment report comes as Americans continue to contend with rising fuel costs tied partly to instability in the Middle East. Higher energy prices could add to inflationary pressure even as wage growth remains relatively restrained.
The Bureau of Labor Statistics is scheduled to release September employment figures Oct. 2.
