U.S. Economy Gains 187,000 Jobs in August as Unemployment Rate Surprisingly Rises

By FOX Business
Posted on 09/01/23 | News Source: FOX Business

U.S. job growth continued at a moderate pace in August while the unemployment rate unexpectedly jumped, a sign the labor market is finally cooling in the face of rising interest rates and chronic inflation.

Employers added 187,000 jobs in August, the Labor Department said in its monthly payroll report released Friday, slightly beating the 170,000 jobs forecast by Refinitiv economists. 

At the same time, a separate report based on a survey of households, offered a slightly different picture of the labor market. The report indicated the unemployment rate climbed to 3.8% from 3.5%, even though the labor force participation rate rose last month. It marked the highest jobless rate since February 2022 and the biggest increase since the early days of the COVID-19 pandemic.

The Federal Reserve indicated it is closely watching the report for evidence the labor market is finally softening after more than a year of interest rate hikes. 

Although the report pointed to still-solid hiring in August, it also showed much weaker job growth over the previous two months. Gains for June and July were revised down by a total of 110,000 jobs to a respective 105,000 and 157,000, the government said.