US job growth accelerated sharply in August while the unemployment rate held steady at 4.1 per cent, suggesting an improvement in the labour market after recent struggles, keeping an interest rate hike from the Federal Reserve this month on the table.
The larger-than-expected increase in nonfarm payrolls last month reported by the Labour Department in its closely watched employment report on Friday reflected a rebound in leisure and hospitality employment following two straight monthly declines, as well as a reversal of the drag from local government education.
The unemployment rate was unchanged despite the labour force increasing by 683,000, adding another layer of strength to the report.
Financial markets boosted rate hike bets for the US central bank’s September meeting. The odds had been dialed back after Fed Governor Christopher Waller said at a Reuters NEXT Newsmaker event on Thursday that he was inclined to argue in favor of keeping rates steady if upcoming data confirmed inflation pressures were cooling.
“Even the most committed dove would struggle to find anything in the August employment report to justify keeping interest rates unchanged, with the surge in payrolls driven by strength across the non-health private sectors and the unemployment rate unchanged despite a big rebound in participation,” said Stephen Brown, chief North America economist at Capital Economics.
Nonfarm payrolls surged by 162,000 jobs last month after an upwardly revised rise of 21,000 in July, the Labor Department’s Bureau of Labour Statistics said. Economists polled by Reuters had forecast payrolls would increase by 56,000 after a previously reported drop of 23,000 in July.
Estimates ranged from as low as a loss of 25,000 jobs to as high as a gain of 121,000. Labour market momentum had decelerated after surging in the spring.
&uuid=(email))