US nonfarm payrolls (NFP) rose by 162,000 in August, nearly triple the 56,000 that economists had penciled in.

The unemployment rate held steady at 4.1%, in line with expectations. The numbers further raised bets that the Federal Reserve will hike interest rates at the next FOMC meeting on September 15-16.

A labor-market surprise: participation also climbs

The August jobs report pointed to a resilient US labor market, partly dispelling the concerns that had dominated the conversation last month, when payrolls were reported to have fallen by 23,000 in July.

The US Department of Labor also announced a net upward revision to payrolls for the prior two months of 55,000 jobs.

Labor force participation also came in positive, rising to 61.6% in August from 61.4% previously.

Wage-driven inflationary pressure was slightly higher than expected on an annual basis, with average hourly earnings up 3.1% year-over-year versus the 3% forecast by consensus.

On a monthly basis, average hourly wage growth matched expectations, at 0.3%.

Average hours worked came in at 34.4, up from 34.3 previously.

Job growth in both the private and public sectors

The nonfarm payrolls report showed that private-sector payrolls rose by 127,000, more than double the 45,000 gain expected and up from the prior increase of 30,000.

Manufacturing payrolls performed particularly well, adding 16,000 jobs versus the 5,000 expected. Public-sector jobs rose by 35,000, a reversal from the prior reading’s decline of 53,000.

The nonfarm payrolls figure, one of this week’s key market movers, reinforces speculation that the Federal Reserve under Kevin Warsh will raise rates following the next meeting on September 15-16.

Fed meeting countdown: two upcoming reports matter more than today’s NFP

Yesterday, hopes that rates would be left unchanged were bolstered by comments from Fed Governor Chris Waller who, in an interview with Reuters, said he would be willing to support the status quo if inflation continues to gradually cool.

Waller said the outcome of the next Fed meeting will hinge mainly on August’s US inflation data — the CPI and PPI reports — due out shortly before the Federal Reserve gathers.

In his remarks at the Jackson Hole symposium, Fed Chair Kevin Warsh had already signaled a firm determination to bring inflation growth back to the 2% target.

Meanwhile, keep an eye on how key assets reacted to the nonfarm payrolls release: the dollar strengthened, with the euro-dollar exchange rate down 0.22% to $1.1598.

US Treasury yields reacted immediately, with the 2-year yield rising more than 7 basis points to 4.425%, its highest level since January 2025.

Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, echoed Waller in saying that the data to watch for clues on the Warsh Fed’s next moves on rates will be the inflation reports. Ahead of the nonfarm payrolls release, she said: “An upside surprise on jobs will likely fuel rate-hike concerns, but the outcome will depend on next week’s inflation data.”

Zentner added that “if the data comes in weaker than expected, the Fed will likely feel comfortable treating the potentially inflationary signals from the labor market as less significant.”

US inflation data will be released next week, with the producer price index due on Thursday, September 10. The consumer price index will follow the next day, Friday, September 11.

Janus Henderson’s take on the jobs report and the Fed’s next moves

Bradford Smith, portfolio manager at Janus Henderson, commented on the US jobs report as follows:

«A blockbuster US jobs report for August is a reminder that this data point has become extremely volatile, while at the same time slightly raising the odds of a rate hike in September. The addition of 162,000 jobs will certainly weigh in favor of a “hike” as the Fed weighs whether to raise its benchmark rate in the face of this month’s persistent inflation; however, Chair Warsh has already urged markets not to fixate on this single data point and to focus instead on next week’s inflation data in the form of the consumer price index (CPI). The strong jobs number follows a distinctly weak one last month, a reminder that the volatility of this indicator is likely to persist as the economy oscillates around full employment. Nonfarm payrolls rose by 162,000 in August, well above economists’ estimate of 55,000 and a sharp rebound from the 23,000 jobs lost the month before. Job growth was driven by the private sector, which added 127,000 positions. The unemployment rate held at a still-low 4.1%, below the level the Fed itself considers neutral, indicating the labor market remains solid. As a result, the debate within the central bank will center mainly on upcoming inflation data. Following Chair Warsh’s hawkish remarks at Jackson Hole last week, the Fed appears clearly inclined to act should incoming data fail to show further progress on disinflation. This report slightly raises the urgency to act.»

Editor’s note

This article was originally published in Italian on money.it by Laura Naka Antonelli on September 04, 2026 as «Non Farm Payrolls +162.000 ad agosto, il triplo delle stime. Ma nodo tassi Fed sarà sciolto solo dopo questi 2 dati». It has been translated and adapted for an international audience by the Money.it International desk.