A surge in hospitality and education employment propelled the US economy to create tens of thousands more jobs than expected last month, the latest figures suggest.
The number of jobs added to the world’s largest economy increased by 162,000 in August, almost triple the 56,000 expected by analysts.
The stronger jobs numbers are likely to add to growing expectations that the Federal Reserve will raise interest rates later this month.
But President Donald Trump urged the Federal Reserve to cut rates, saying the U.S. should have “the lowest rate of any country in the world.”
“The Federal Reserve Board, with its great new leader, needs to be smart: BE PATRIOTS for a change. High interest rates put America at a very unfair disadvantage, and I won’t let that happen!” Trump said in a social media post, external.
Last week, Kevin Warsh, president of the US central bank, signaled that rates could rise if policymakers were not confident that price increases were slowing for Americans.
Inflation, which measures price increases over time, remains above the Federal Reserve’s 2% annual target, with prices rising 3.4% over the past 12 months, according to the latest data.
The next interest rate decision will be made on September 15 and 16. Rates remained unchanged between 3.5% and 3.75% in July for the fifth time in a row, but concerns about inflation remain due to the ongoing conflict between the United States and Iran, which has caused global oil prices to rise.
On Friday, diesel prices in the United States hit an all-time high of $5.85 a gallon on average, compared to $3.71 a year ago.
But despite the rising cost of living, wages also appear to be rising. In August, the average hourly wage for all employees was $37.75 on average, having increased 3.1%.
“Even the most committed dove would be hard-pressed to find anything in the August jobs report to justify keeping interest rates unchanged,” said Stephen Brown, chief North America economist at Capital Economics.
He added that the strength of the labor market meant that the latest inflation figures released next week would only need to be moderately above the Federal Reserve’s target to fuel expectations of a September increase.
“A rate hike became a little more likely,” said Neil Birrell, chief investment officer at investment firm Premier Miton.
According to CME Group’s “FedWatch” data, just over 60% of traders were betting on an interest rate hike in September.
An increase in employment during the last month of summer in restaurants and bars, as well as in local government education ahead of the new school year, was behind the August labor market rebound.
The U.S. Bureau of Labor Statistics revised up weaker employment numbers released earlier this summer, revealing a stronger labor market than previously thought. Instead of considering the economy had shed 23,000 jobs in July, later estimates found that about 44,000 had been created.
While many more jobs were added, the U.S. unemployment rate remained unchanged at 4.1% last month, with seven million unemployed. Both measures have changed little over the year.
