U.S. hiring rebounds in August, but wage growth lags inflation

U.S. employers added 162,000 jobs in August, far exceeding economists’ forecasts, while the unemployment rate held at 4.1%. Job totals for the previous two months were revised higher by a combined 55,000, including a revision that changed July from a loss to a gain of 21,000.

Employers have added an average of more than 80,000 jobs a month this year, up from last year but below the pace recorded in 2023 and 2024. Some economists said the August increase may represent a rebound from weaker hiring earlier in the summer.

Average hourly earnings rose 3.1% over the past year, trailing the 3.4% annual inflation increase recorded through July. Economists said the gap could limit consumer spending as households face higher costs and debt, while Federal Reserve officials weigh upcoming inflation data in deciding whether to raise interest rates.

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