U.S. Payrolls Rise by 162,000 in August, Beating Expectations

The U.S. labor market delivered a stronger-than-expected rebound in August. The Bureau of Labor Statistics said on September 4, 2026 that nonfarm payrolls increased by 162,000 last month, more than tripling the consensus forecast of 53,000 and leaving economists short by 109,000 jobs. The gain follows a weak prior month. July payrolls were revised to a loss of 23,000 jobs, down from earlier estimates. The unemployment rate was unchanged at 4.1%. Labor force participation edged up to 61.6%. Pay growth also firmed: average hourly earnings rose 0.3% month over month to $37.75, bringing the year-over-year increase to 3.1%. Hiring was concentrated in a few categories. Food services and drinking places added 59,000 jobs, local government education rose by 42,000, manufacturing gained 16,000, and healthcare added 13,000. Information was the notable laggard, posting a net decline. The report also highlighted a sharp divergence with ADP's August private-sector estimate of 38,000 jobs, far below both expectations and the government headline. ADP measures private payrolls, while the BLS total includes government hiring. With local education employment contributing a significant share of the month's gains, the underlying private-sector picture appears materially softer, closer to what ADP indicated. For markets and policy, a month with payroll growth above 160,000 when many expected a weak print complicates the Federal Reserve's rate outlook. It reduces the urgency for near-term rate cuts, even as wage growth of 3.1% year over year remains moderate by recent historical standards and does not, by itself, sharply intensify inflation concerns.