The economy added 162,000 new payroll jobs in August, the Bureau of Labor Statistics reported Friday, as businesses shrugged off the energy supply shock from the war with Iran.
The unemployment rate remained at 4.1%.
Forecasters had expected payroll job growth to be 55,000, so the report was well higher than expectations.
The positive report came after a very disappointing report the month before, which initially showed that the labor market contracted and that the economy lost jobs, although this latest report revised up July’s report and found that the economy actually added over 21,000 jobs in July. It also revised June’s report higher.
Friday’s report provides very welcome news for President Donald Trump, who has been weighed down by historically low consumer sentiment and voter frustration over too-high inflation and affordability concerns.
Much of the recent surge in prices is due to higher energy prices stemming from the war in Iran, which began earlier this year and sent gasoline prices much higher, thereby driving up overall headline inflation.
Months later, the conflict remains unresolved and has been marked by stop-and-go negotiations and many open questions. The halt of oil tankers through the Strait of Hormuz at various times has further exacerbated the energy supply shock.
But the August jobs report shows that despite the frustrations with inflation and low consumer sentiment, companies are still hiring — good news for the overall economy, even despite some slowing this year.
The Federal Reserve has also received outsize attention given this year’s surge in inflation following the kickoff of the Iran war.
The Fed, under new Chairman Kevin Warsh, opted to hold interest rates steady at all of its meetings so far, but most investors anticipate that the central bank will move to raise interest rates at least once before the end of the year.
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[ H/T Washington Examiner ]
