U.S. August Payrolls Rise 162,000, Easing Fed Rate-Hike Pressure

DWS chief U.S. economist Christian Scherrmann said U.S. nonfarm payrolls rose by 162,000 in August, above market expectations, while July data were revised from a decline of 23,000 to an increase of 21,000, according to ETNet. Job gains in goods-producing industries increased from 29,000 to 41,000, while services-sector hiring doubled from 42,000 to 86,000. Health care remained the main driver of employment growth, and a rebound in leisure and hospitality also supported the labor market. By contrast, information services and financial services lost 23,000 and 11,000 jobs, respectively, while government hiring rebounded to an increase of 35,000 from a decline of 50,000 in the prior month. The unemployment rate held at 4.1% as the labor force participation rate rose from 61.4% to 61.6%. Average hourly earnings increased 3.1% from a year earlier, suggesting the labor market has not tightened further. Scherrmann said the report may not be enough for the Federal Reserve to justify a rate hike at its upcoming policy meeting, and that Friday's CPI data will be an important input for the central bank's assessment.