Payrolls Rose 162,000 in August, and July's Reported Job Loss Was Revised Into a Gain

by Tomas Ferreira · September 4, 2026

Markets Reporter, US Market Current

The August employment report landed at 8:30 a.m. Eastern on Friday and reset the shape of the argument the market has been having since Labor Day week began. Total nonfarm payroll employment increased by 162,000 in August, according to the Bureau of Labor Statistics release, and the unemployment rate was unchanged at 4.1 percent, with 7.0 million people counted as unemployed.

The headline gain arrived several times larger than the consensus going in. Reuters reported that economists it surveyed had looked for a rise of 56,000; UPI, in its 10:53 a.m. account of the release, put the Dow Jones consensus at 53,000. The BLS itself framed the month against a much softer recent trend, noting that August's increase exceeded the average monthly gain of 31,000 over the prior 12 months.

The revisions were arguably the more consequential half of the release. In the BLS's words, "The change in total nonfarm payroll employment for June was revised up by 11,000, from +20,000 to +31,000, and the change for July was revised up by 44,000, from -23,000 to +21,000." Combined, the two months were lifted by 55,000.

That July line matters because the reported July contraction had been doing a great deal of analytical work. A month that had been logged as an outright loss of 23,000 jobs is now recorded as a gain of 21,000. The three most recent months, as they now stand in the BLS's own table, read +31,000 for June, +21,000 for July and +162,000 for August.

The industry detail is concentrated. Food services and drinking places added 59,000 jobs, which the BLS described as well above the average monthly gain of 12,000 over the prior 12 months. Reuters put the wider leisure and hospitality gain at 62,000. Local government education added 42,000 jobs, a move the BLS said largely offset a decrease in the prior month.

Elsewhere the picture was more mixed than the headline implies. Construction employment, in the BLS's phrasing, "changed little in August (+22,000)", while manufacturing "continued its upward trend (+16,000)" and is up by 58,000 since a recent low in December 2025. Health care added 13,000, which the agency flagged as slower than its average monthly gain of 32,000 over the prior year.

One sector went the other way with force. Information employment declined by 23,000 in August, following losses that the BLS said had averaged 8,000 per month over the prior 12 months. Within that, the agency identified losses of 8,000 in computing infrastructure providers, data processing, web hosting, and related services, 7,000 in publishing industries and 5,000 in broadcasting and content providers.

Mining, quarrying, and oil and gas extraction; wholesale trade; retail trade; transportation and warehousing; financial activities; professional and business services; social assistance; and other services all showed little change on the month, according to the release. The BLS uses that phrase where a monthly movement is not statistically meaningful, so the list is a reminder of how much of the private economy simply held still in August.

Pay rose at a pace that has not accelerated. Average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents, or 0.3 percent, to $37.75, and were up 3.1 percent over the 12 months. For production and nonsupervisory employees, average hourly earnings rose 11 cents, also 0.3 percent, to $32.53. The average workweek edged up 0.1 hour to 34.4 hours; in manufacturing it rose 0.1 hour to 40.5 hours, with overtime unchanged at 3.1 hours.

The household survey, which is a separate sample, was busy. Reuters reported that the labor force expanded by 683,000 in August, while the BLS put the increase in the number of employed people at 569,000 between July and August. The labor force participation rate edged up to 61.6 percent but, the agency noted, is down by 0.5 percentage point since January. The employment-population ratio was 59.1 percent and showed little change on the month or the year.

Measures of slack moved in different directions. The number of people employed part time for economic reasons fell by 414,000 to 4.4 million. The long-term unemployed, those jobless for 27 weeks or more, numbered 1.9 million and made up 27.0 percent of all unemployed people. Marginally attached workers were little changed at 1.7 million, of whom 441,000 were counted as discouraged.

Among the major worker groups, the jobless rate for adult men was 4.0 percent and for adult women 3.5 percent. The teenage rate edged up to 14.1 percent. By race and ethnicity, the rate was 3.7 percent for White workers, 6.0 percent for Black workers, 4.8 percent for Hispanic workers, and declined to 3.2 percent for Asian workers.

Rate expectations moved immediately, and toward an increase rather than a cut. The Associated Press reported that expectations for a rate hike in September rose to 60.2% on Friday after the release, up from 49.4% Thursday and 57% a week earlier, according to CME FedWatch. Reuters, citing short-term interest-rate futures rather than FedWatch, put the implied chance of an increase at the Sept. 15-16 meeting at about 65%, up from about 55% before the employment report. The two readings use different baselines and different instruments, and both are snapshots of a market that has been repricing continuously since 8:30 a.m.

Economists reacted to the composition as much as the total. Stephen Brown of Capital Economics told Reuters that "Even the most committed dove would struggle to find anything in the August employment report to justify keeping interest rates unchanged." Jeffrey Roach, chief economist at LPL Financial, told the same wire that a rate hike may generate less market volatility than another meeting in which policymakers choose to stand pat.

Policymakers have one more major data point first. The AP reported that Federal Reserve governor Christopher Waller said that if new data next week shows inflation is cooling, he "would be inclined" to keep the Fed's benchmark rate unchanged. The August Consumer Price Index is scheduled for 8:30 a.m. on Sept. 11, according to the BLS release calendar, and Reuters put the Federal Open Market Committee's next meeting on Sept. 15-16.

Markets were still trading as this was written and no closing levels for Friday exist. The AP reported that the S&P 500 slipped 0.1% in morning trading and that the Dow Jones Industrial Average was down 211 points, or 0.4%, as of 10:05 a.m. Eastern time, while the Nasdaq composite edged up 0.1%. With Monday's Labor Day holiday closing US markets, the next full session after Friday's is Tuesday, Sept. 8.