August jobs report delivers unexpectedly strong news for US economy

August jobs report delivers unexpectedly solid news for US economy.

Key points

• Though the lowest August total since 2022, employers confirmed 52, 881 job cuts in August, up 58% from July.
• Employers confirmed aims to hire 12, 325 workers last month representing a 23% decline from July but marking the highest August total since 2022, according to a Sept.
• Economy will add 5.9 million jobs between 2025 and 2035, with total employment growing 3.5%.
• Economy continued a surprising 162, 000 jobs in August, the Labor Department estimated Sept.
• The construction sector continued 22, 000 roles, and the manufacturing industry gained 16, 000 jobs.

August jobs report delivers unexpectedly solid news for US economy. Rachel Barber USA TODAY. August jobs report delivers unexpectedly solid news for US economy.

While unemployment remained at 4.1%, the U.S. Economy continued 162, 000 jobs in August, the strongest monthly gain since March, driven by expansion in food services.

In practice, the U.S. Economy continued a surprising 162, 000 jobs in August, the Labor Department estimated Sept. 4, even as economists remarked a "low-hire, low-fire" dynamic produced it tough for unemployed Americans to find work.

Notably, the 162, 000 estimate for August far surpassed forecasters' expectations and marked a rebound after U.S. Employers continued a now-revised 21, 000 jobs in July. The department previously estimated U.S. Employers shed 23, 000 jobs in July. Payroll gains for June were additionally revised higher, reflecting a stronger summer job market than previously thought.

For context, the unemployment rate stayed put at 4.1% in August after falling in June and July when hundreds of thousands of Americans halted looking for work. The labor force participation rate ticked up to 61.6% in August after falling to 61.4% the month before. Is AI killing your chances of landing a job?

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"There are always areas of concern in the labor market. For example, among recent graduates, " Federal Reserve Chair Kevin Warsh remarked Aug. 28. "In general, though, individuals who want to work, by and substantial, are holding or finding jobs. They may well be concerned regarding future labor disruptions, but as of now, I believe the labor markets are broadly consistent with full employment."

Average hourly earnings for employees on private, nonfarm payrolls rose by 10 cents to $37.75 in August, the department remarked. They rose 3.1% over the year. The department's next inflation report due out Sept. 11 will reveal whether paychecks kept up with inflation in August. They did not in July.

More: CPI report demonstrates inflation cooled again, but still outpaced paychecks in July.

Fed authorities will review the new employment numbers for August and the upcoming inflation report as they prepare for their next interest rate decision on Sept. 16. A number of policymakers have signaled they may backing a rate hike if the report demonstrates inflation is not on a path back to the central bank's 2% annual target.

"We believe today's report further confirms that policymakers will remain focused on the inflation side of their mandate, " Edward Jones investment strategy analyst Brock Weimer remarked in a note to USA TODAY. "While August inflation data will likely play a key role in shaping the Fed's decision later this month, and a rate hike is far from a foregone conclusion, we believe policymakers will show limited tolerance for upside inflation surprises." See the jobs data.

U.S. Employers continued 162, 000 jobs in August, the highest monthly total since March this year. The unemployment rate remained unchanged at 4.1%. Which industries are hiring?

Notably, a boost in food services and drinking places employment drove the payroll gains. The sector continued 59, 000 jobs in August.

Not far behind was local administration education. It went on 42, 000. The construction sector continued 22, 000 roles, and the manufacturing industry gained 16, 000 jobs. The health care sector continued 13, 000, a number that still represents expansion but is lower than its average monthly gain of 32, 000 over the past year.

Employment in the information industry fell by 23, 000 in August. It was little changed in other sectors including social assistance, financial activities, and professional and business services, the department remarked.

"Taken together, the data point to a stable labor market, not an accelerating one, " LinkedIn's head of economics for the Americas Kory Kantenga remarked in a note to USA TODAY. "The solid gains in Leisure and Hospitality and Administration are a rebound from earlier summer weakness, not a shift in trend. Do not expect a repeat."

ADP's National Employment Report published Sept. 2 offers another look at the U.S. Labor market. It discovered private employers went on a much lower 38, 000 jobs in August.

According to the ADP report, the education and health services sector continued 45, 000 roles, leisure and hospitality gained 16, 000, and construction went on 12, 000 in August. It discovered employment in the financial activities sector climbed, but that employment declined in professional and business services, trade, transportation, and utilities, and the information sector. How is the US job market overall?

Warsh and other Federal Reserve authorities described the U.S. Labor market as "stable" in August. Throughout the Fed's 12 districts, three experienced "modest" gains, four demonstrated "slight" gains, and five documented no change in employment since early July, according to the central bank's latest Beige Book.

"Things do look overall pretty steady, " Kantenga remarked in an interview ahead of the report. "That doesn't mean that they're good for job seekers."

Other Labor Department data published Sept. As workers continued clinging to their jobs in part as they feared they wouldn't be able to land another, 1 indicated the national quits rate changed little from July to August. The amount of job openings was additionally little changed in August from the month before, the department stated, leaving unemployed workers stuck in a competitive market.

Facing fierce competition and a hiring process being reshaped by artificial intelligence, some job seekers have halted looking for work entirely. Kantenga remarked one reason behind past months' labor force departures could be that Americans are realizing their wages aren't keeping up with inflation.

"When it comes to people joining the labor force and staying in the labor force, it's about the incentives, " Kantenga remarked. "For some people, that's going to be a better deal to stay home, provide your own childcare rather than going to work and paying for childcare that costs more than your annual salary." Where is the US job market headed?

U.S. Employers confirmed aims to hire 12, 325 workers last month representing a 23% decline from July but marking the highest August total since 2022, according to a Sept. 3 Challenger, Gray & Christmas report.

So far in 2026, firms' hiring aims have rose 37% when compared to the same period in 2025. Industries with the most confirmed hires in August were aerospace and defense, technology, and industrial goods, the report stated.

Though the lowest August total since 2022, employers confirmed 52, 881 job cuts in August, up 58% from July. It discovered that from January to August, job cut announcements were down 41% when compared to the first eight months of 2025.

For the first time since February this year, artificial intelligence was not the top reason firms cited for cuts. Instead, restructuring led all other reasons. Cuts were most common in the consumer products, food, and technology sectors.

In projections published Aug. 27, the Labor Department estimated the U.S. Economy will add 5.9 million jobs between 2025 and 2035, with total employment growing 3.5%. That's a much slower pace than the 10.9% expansion recorded between 2015 to 2025. While demand for workers will rise in health care and fields related to the AI buildout, the department expects employment in the federal administration and retail trade will decline over the next decade. What does this mean for the Fed and interest rates?

Though a hike is not guaranteed, the surprisingly solid August jobs report may provide the Federal Reserve some leeway to raise its benchmark for interest rates at its next session.

Before then, policymakers will want to review the department's August inflation report. If inflation does not slow, a number of voting members of the Federal Open Market Committee have expressed interest in raising the target range for interest rates. The committee hasn't done so since July 2023.

President Donald Trump would like Fed policymakers to do the opposite. He took to Truth Social to celebrate the solid report and renewed his calls for lower interest rates.

"EMPLOYERS ADDED 162, 000 JOB IN AUGUST, " Trump wrote. "Lower the interest rates since the U.S.A. Is a much stronger credit than it was just a short time ago! A STRONG COUNTRY MEANS A LOWER INTEREST RATE."

In practice, the Fed typically raises rates to tame inflation and lowers them to stimulate the job market. Slowing the rate of cost increases appears to be the Fed's priority, Kantenga stated.

"For a lot of households, the price increases that they've experienced over the last four or five years, it's been significant, " he remarked, adding given rising gas costs, "If you can't afford to get to the job, what's the point of having one?"

After the August jobs reports release, most traders are betting the committee will raise the target range a quarter point on Sept. 16, bringing it to 3.75% to 4%, according to CME FedWatch.

While a hike probable wouldn't change labor market conditions "immediately, " it could lead to a hiring slowdown in certain sectors over time, Kantenga stated. (This story was updated to add new information.).

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Taken together, the developments around august jobs report delivers unexpectedly strong news for US economy point to a situation that is still moving, and the coming days should bring more clarity.