September 6, 2022 — Solid Jobs Report for August


The US showed respectable job growth in August adding 315,000 new jobs. However, the unemployment rate rose by 0.2 percent to 3.7 percent, while hourly wages were up 5.2 percent year-over-year in August.

Even though the unemployment rate rose a bit, attributable to a rise in the labor force participation rate, the US economy has recovered all the jobs lost over the course of the pandemic and has added 240,000 more jobs than it had prior to March 2020. The rise in unemployment is seen as a positive. With a higher unemployment rate, employers will have an easier time finding workers and easing wage pressure. This should act to cool down wage growth, consequently slowing inflation.  There is hope for a soft landing for the economy, as jobs are being added without causing extra pressure to inflation.

This data will keep the Fed on track to raise rates by 0.5 to 0.75 percent later this month seeing the job market is not showing signs of collapse. Fed President Powell warned in August the Fed’s moves will hurt the labor market and the economy, but, their primary goal is to tame inflation.