The U.S. economy created 187,000 jobs in August, the Labor Department reported on Friday, marking a surprise jump from July's revised figures and underscoring continued strength in the labor market despite rising interest rates.

Economists had expected the U.S. economy gained 170,000 jobs last month, while 157,000 were added in July. The unemployment rate was 3.8%, compared with 3.5% in July and the 3.5% consensus call among economists surveyed by FactSet.

Employers likely added jobs at a slower pace in August and wage growth likely cooled, contributing more evidence to the argument that the still-strong labor market has begun to moderate in all the right ways.

Economists forecast that the U.S. economy added 170,000 jobs in August, consensus estimates from FactSet show, marking a step down from July's pace of 187,000 new jobs. Economists also expect that the unemployment rate held steady at a remarkably low 3.5%.

A more tepid August jobs report would come close on the heels of other data released earlier this week showing an unexpected decline in job openings in July and a healthy slowdown in the share of workers quitting their jobs. Both of those developments suggest a reduction in labor demand, which can help rebalance the labor market and relieve pressure on wage inflation.

Economists expect average hourly earnings to have increased by 0.3% in August, down from a 0.4% rise in July, to hold steady at an annual growth rate of 4.4%.

Against that backdrop, another drop in the number of jobs added monthly could help reinforce the view that the unsustainably hot labor market is well on its way back to a prepandemic normal.

Source : Marketwatch