Unemployment rate unexpectedly rose to 3.8% in August as payrolls increased

The unemployment rate rose sharply in August, as the summer of 2023 neared a close with a job market in slowdown mode.

  • Nonfarm payrolls increased by 187,000 in August, ahead of the estimate for 170,000. The counts for June and July were revised considerably lower.
  • However, the unemployment rate was 3.8%, up significantly from July and the highest since February 2022. The “real” unemployment rate jumped to 7.1%.
  • Average hourly earnings rose 0.2% for the month and 4.3% from a year ago, both slightly below forecasts.

Markets widely expect the Fed to skip a rate increase at its Sept. 19-20 meeting. However, market pricing still points to about a 38% probability of a final hike at the Oct. 31-Nov. 1 meeting.

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