August Nonfarm Payrolls

August Nonfarm Payrolls
Updated: 04-Sep-26 09:23 ET

Highlights

That August employment report caught the market by surprise with its headline strength.
Nonfarm payrolls increased by 162,000, much better than expected; the unemployment rate of 4.1% was lower than expected; the average workweek at 34.4 hours was higher than expected; and the 0.3% increase in average hourly earnings was as expected.

Key Factors

August nonfarm payrolls increased by 162,000 (Briefing.com consensus: 45,000). The 3-month average for total nonfarm payrolls increased to 71,000 from 38,000. July nonfarm payrolls revised to 21,000 from -23,000. June nonfarm payrolls revised to 31,000 from 20,000.
August private sector payrolls increased by 127,000 (Briefing.com consensus: 45,000). July private sector payrolls revised to 71,000 from 30,000. June private sector payrolls revised to 26,000 from 30,000.
August unemployment rate was 4.1% (Briefing.com consensus: 4.2%) versus 4.1% in July. Persons unemployed for 27 weeks or more accounted for 27.0% of the unemployed versus 25.5% in July. The U6 unemployment rate, which accounts for unemployed and underemployed workers, decreased to 7.7% from 7.9% in July.
August average hourly earnings were up 0.3% (Briefing.com consensus: 0.3%) on the heels of an upwardly revised 0.2% increase (from 0.1%) in July. Over the last 12 months, average hourly earnings have risen 3.1% versus 3.2% for the 12 months ending in July.
The average workweek in August was 34.4 hours (Briefing.com consensus: 34.3) versus 34.3 hours in July. The manufacturing workweek increased 0.1 hour to 40.5 hours. Factory overtime was unchanged at 3.1 hours.
The labor force participation rate increased to 61.6% from 61.4% in July.
The employment-population ratio increased to 59.1% from 58.9% in July.

Big Picture

The quick takeaway by the market is that this report just might persuade the Fed to raise rates at its September FOMC meeting. The key takeaway, though, is that a rate hike in September is not assured by this August data. To that end, the 3-month average for total nonfarm payrolls was still just a modest 71,000, there was a moderation in average hourly earnings growth to 3.1% from 3.2% on a year-over-year basis, and persons unemployed for 27 weeks or more accounted for 27.0% of the unemployed versus 25.5% in July.

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