US economy adds 162,000 jobs in August, higher than expected: CEI analysis

The Bureau of Labor Statistics’ report for August shows the economy added 162,000 jobs, higher than economists predicted. While the news is a welcome sign of the economy’s strength, attention is now on how this report will affect the Federal Reserve’s next interest rate move.

CEI Senior Economist Ryan Young:

“A better-than-expected jobs report for August makes it easier for the Fed to increase interest rates at its upcoming meeting on September 15-16. The better the economy does, the easier it will be for the Fed to concentrate on fighting inflation.

“Information employment, which includes data center jobs, decreased during the month, as it has for most of the last three years. While data center jobs themselves have been rising for a while, this has not been enough to offset losses elsewhere in the information category, such as publishing and broadcasting. But in August, data center jobs themselves decreased, which could be a sign that NIMBY (not in my backyard) and environmental activists are blocking more projects.

“The most encouraging part of August’s report is that the labor force participation rate went up for the first time since September of last year. Prime-age participation has been strong all along, but a flood of retirees has lowered the overall participation rate in the last few years.”

CEI Research Fellow Sean Higgins:

“Friday’s report that the economy gained 162,000 in August is a welcome reminder that our economy remains resilient despite the pressures of inflation and the volatility of the trade situation. Particularly encouraging was that employment in bars and restaurants edged up by 59,000 jobs. The food service industry frequently serves as an indicator of hiring trends because that’s an area where consumer spending can shift rapidly.

“The jobs numbers would be more encouraging if the Labor Department’s reporting wasn’t so erratic. The August report revised July’s 23,000 job loss to a 21,000 job gain. That’s likely a result of job surveys coming in late. The department’s number crunchers are doing the best they can and it is not unusual for the reports to be revised after the fact. As encouraging as the August numbers are, we should keep in mind that they’re likely to be revised soon too.”