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August nonfarm payrolls grew by 162,000, exceeding economist expectations and raising interest rate hike probabilities

The Bureau of Labor Statistics reported Friday that the U.S. economy added 162,000 nonfarm payrolls in August, significantly exceeding the 53,000 to 65,000 jobs expected by economists. The unemployment rate held steady at 4.1% as anticipated. These figures represent the strongest job gains since March and include upward revisions for both June and July. Market reactions were mixed. The Dow Jones Industrial Average fell 226 points, or 0.4%, while the S&P 500 slid 0.2%. The Nasdaq Composite traded up 0.1%. Treasury yields rose following the report, with the 2-year yield hitting its highest level since January 2025. The data increased expectations that the Federal Reserve may hike interest rates at its upcoming policy meeting. President Trump praised the jobs report and urged the Federal Reserve to lower interest rates, threatening to cut off trade with countries with which the U.S. has a deficit. In other news, Lululemon shares fell 20% in premarket trading after the company reported a disappointing outlook and missed second-quarter revenue estimates. Volkswagen announced plans to cut up to 100,000 jobs as part of a transformation plan to address tariff pressures and competition from China.

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