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Surprisingly strong US jobs figures fuel rate rise bets

A boost in hospitality and education employment drove the US economy to create tens of thousands more jobs than expected last month, latest figures suggest. The number of roles added to the world's biggest economy increased by 162,000 in August, almost triple the 56,000 forecast by analysts. The stronger jobs figures are likely to add […]

By deepak · September 4, 2026 · 3 min read

A boost in hospitality and education employment drove the US economy to create tens of thousands more jobs than expected last month, latest figures suggest.

The number of roles added to the world's biggest economy increased by 162,000 in August, almost triple the 56,000 forecast by analysts.

The stronger jobs figures are likely to add to growing expectations that the Federal Reserve will increase interest rates later this month.

But President Donald Trump urged the Fed to cut rates saying the US should have the "LOWEST RATE of any country in the World".

"The Fed Board, with its great new leader, must get smart – BE PATRIOTS for a change. High interest rates put the U.S.A. at a very unfair disadvantage, and I won't allow that to happen!", Trump said in a post on social media, external.

Last week, Kevin Warsh, chairman of the US central bank, signalled that rates could be hiked if policymakers were not confident price rises were easing for Americans.

Inflation, which measures price increases over time, remains above the Fed's 2% annual target, with prices up 3.4% in the past 12 months, according to the latest data.

The next interest rate decision will be made on 15-16 September. Rates were left unchanged between 3.5% and 3.75% in July for the fifth time in a row, but concerns over inflation remain due to the ongoing conflict between the US and Iran, which has caused as surge in global oil prices.

On Friday, US diesel prices hit an all-time high of $5.85 a gallon on average, compared to $3.71 a year ago.

But despite the cost of living rising, wages also appear to be increasing. In August, average hourly earnings for all employees were $37.75 on average, having increased 3.1%.

"Even the most committed dove would struggle to find anything in the August employment report to justify keeping interest rates unchanged," said Stephen Brown, chief North America economist at Capital Economics.

He added that the strength in the jobs market meant that the latest inflation figures released next week would only need to be moderately above the Fed's target to fuel expectations of a September hike.

"A hike in rates just became a bit more likely," said Neil Birrell, chief investment office of investment firm Premier Miton.

Just over 60% of traders were betting on an interest rate hike in September, according to CME Group's "FedWatch" data.

An increase in employment during the final month of the summer in restaurants and bars, as well as in local government education ahead of the new school year, was behind August's labour market rebound.

Source: Read the original article on www.bbc.co.uk

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