U.S. job market rebounds as employers add 162,000 jobs

The U.S. labor market delivered a stronger-than-expected rebound in August, with employers adding 162,000 jobs and the unemployment rate holding at 4.1%.

The Labor Department's report exceeded the 65,000 jobs economists had expected, according to a FactSet poll. Revisions also added 55,000 jobs to the June and July payrolls. July's figure shifted from an earlier report of a 23,000-job decline to a gain of 21,000.

The labor force, which includes people working or seeking work, expanded by 683,000 in August after falling in June and July. Yet the market remains unusual: employers are hiring cautiously, while layoffs remain rare. David Kelly, chief global strategist at J.P. Morgan Asset Management, called it “a very strange labor market.”

“

It’s a very strange labor market.

Gross hiring fell 5% to fewer than 5.1 million new jobs, according to Labor Department data. At the same time, companies have held on to existing workers after remembering the labor shortages that followed the end of COVID-19 lockdowns.

The available workforce has shrunk as President Donald Trump's immigration crackdown limits labor supply and baby boomers retire. More than 1.3 million people have left the U.S. labor force over the past year. A Federal Reserve study cited in the report suggests the monthly hiring rate needed to keep unemployment stable may have fallen from 155,000 in 2023 and 2024 to nearly zero. Companies are increasingly seeking productivity gains through technology and artificial intelligence rather than recruiting from a smaller pool of workers.

“

Businesses are increasingly focused on boosting efficiency through technology and AI and increasingly seek to do more with their existing workforce.