US employers add 162,000 jobs in August as unemployment rate holds at 4.1%

Payroll growth exceeds expectations

The United States economy added 162,000 nonfarm payroll jobs in August 2026, surpassing consensus forecasts from economists polled by Reuters, who had anticipated an increase of 56,000. The release from the Bureau of Labor Statistics also included upward revisions for the preceding two months totaling 55,000 positions. Job growth in June was revised upward to 31,000 from an initial estimate of 20,000, while July figures were adjusted to a gain of 21,000 after an initially reported contraction of 23,000 jobs.

The national unemployment rate held steady at 4.1%, remaining below the recent peak of 4.5% recorded in November. Average hourly earnings increased by 0.3% on a monthly basis, matching expectations after July wage growth was revised to 0.2%. Over the twelve months through August, wages grew by 3.1%. The combination of steady unemployment and firmer payroll expansion indicates sustained activity in the domestic workforce following a deceleration earlier in the summer.

Financial markets and Federal Reserve policy

Following the employment release, expectations for an interest rate increase at the Federal Reserve meeting on September 15–16 rose in financial markets. Traders on futures markets priced the probability of a 25 basis point rate increase between 59% and 65%, up from roughly 52% to 55% before the data was published. The Federal Reserve maintains its benchmark interest rate in the target range of 3.50% to 3.75%. Prior to the report, Federal Reserve Governor Christopher Waller had stated at a conference that he favored holding borrowing costs steady if inflation showed signs of cooling.

This is obviously a very volatile report, but it does mean that at this point the Fed's focus is going to be on inflation.

Yields on United States government debt rose across multiple maturities following the report. The 2-year Treasury yield rose 7.6 basis points to 4.41%, while the 10-year yield gained 3.2 basis points to 4.792% and the 30-year yield reached 5.252%. In foreign exchange trading, the dollar index climbed 0.3% to 99.3, whereas the price of gold fell 1.7% to $4,392. Earlier in the week, data from mortgage finance agency Freddie Mac placed the 30-year fixed mortgage rate at 6.71%, a level not seen in over a year.

Sector drivers and macroeconomic background

Hiring gains in August were led primarily by hospitality, including restaurants and bars, alongside local government education ahead of the academic year. In contrast, data published earlier in the week by ADP showed private companies added 38,000 jobs during August, the lowest monthly private total since January. Challenger, Gray & Christmas reported that announced corporate layoffs remained 41% lower than the volume recorded during the same period in the prior year.

Macroeconomic conditions throughout 2026 continue to reflect pressures tied to the military conflict with Iran, which contributed to an oil price shock and logistics disruptions. Annual consumer inflation in the United States accelerated from 2.4% in February to 4.2% in May, before easing to 3.4% in July. Federal Reserve Chair Kevin Warsh previously expressed concern over persistent price pressures while describing conditions across the domestic labor market as stable.