Labor market rebounds
Ahead of the mid-September Federal Reserve meeting to determine the federal funds rate, a new report shows gains in the labor market.
Outperforming expectations from economists that predicted a 50,000- to 60,000-job gain, the report from the U.S. Department of Labor Bureau of Labor Statistics revealed that the labor market added more than 160,000 payroll jobs in August, according to a news article from Forbes. While the leisure, hospitality and local government sectors demonstrated the highest increases in job growth — recovering from dips earlier in 2026 — the construction, manufacturing and professional service sectors showed modest growth and the information and finance sectors exhibited declines.
Despite the positive gains, experts cited in the article noted that the unemployment rate remained at about 4%. The experts stressed that the labor workforce has seen a decline of about 1 million workers over the past year, driven primarily by retirements across the baby boomer generation and decreased immigrant participation. In addition, modest wage growth and persistently high oil prices have not fueled widescale price increases or added pressure to inflation, according to a separate news article from Reuters.
Coupled with the 2.5% annualized rate of inflation and 3% core price increase estimated by the Consumer Price Index and GDP Deflator for Personal Consumption Expenditures, respectively, changes in the labor market could raise the likelihood of a federal funds rate hike in September. However, the experts indicated that additional inflation data will be needed prior to the decision.
Read more: Forbes
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