The U.S. added 162,000 jobs in August, according to the Bureau of Labor Statistics, far exceeding the average forecast of 55,000 from Reuters, Bloomberg, and the Wall Street Journal. The unemployment rate held steady at 4.1%, and the labor force participation rate increased. The job gains followed a revised 21,000 increase in July and an upward revision of 55,000 for the previous two months.

Education and Food Service Drive Growth

Local government education, or public schools, accounted for nearly 42,000 of the jobs added in August as the 2026–27 school year began. Teachers typically return to payrolls at the start of the academic year after summer layoffs. Meanwhile, the food service sector added 59,000 jobs, reflecting seasonal demand and hiring trends during the summer months.

Construction added 22,000 jobs, and healthcare added 12,000. These gains contrasted with job losses in the information and financial activities sectors. The information sector, which includes data processing, web hosting, and publishing, lost 23,000 jobs in August, with notable layoffs at companies like Scripps TV and Zillow. The financial activities sector, including insurance and real estate, fell by 12,000 jobs.

Contradictory Data and Market Reactions

The strong job gains came in sharp contrast to the ADP national employment report, which reported 38,000 private-sector jobs added in August. The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) also showed mixed results, with job openings rising to 7.3 million in July from 7.2 million the previous month, while total separations dropped to 5.1 million from 5.3 million in June.

Meanwhile, the U.S. Dollar Index (DXY) fell below 99.00 to its lowest level in over a week, with the Japanese Yen (JPY) rallying for the second consecutive day. The USD/JPY pair traded near 155.45, its lowest level in a month. A modest pullback in U.S. Treasury yields and less-hawkish comments from Federal Reserve Governor Christopher Waller contributed to the dollar’s decline. Waller said he was “finally seeing some signs of disinflation” but warned that a rate hike could still happen in September if inflation trends reversed. According to the CME FedWatch Tool, the probability of a rate hike at the September meeting fell to 50% from 63% a day earlier.

Wage Growth Slows, Inflation Rises

While job gains were strong, wage growth continued to cool. Average hourly earnings rose 3.1% year over year in August, down from 3.2% in July and marking the slowest pace of 2026. Average hourly earnings stood at $37.75. At the same time, energy and gasoline prices rose due to conflicts in the Middle East, pushing inflation higher despite the slowing wage growth.

The Swiss Franc (CHF) also gained against the U.S. Dollar, with the USD/CHF pair trading near 0.8090. The Swiss National Bank (SNB) has kept its policy rate at 0.5% since a 50-basis-point cut in December. The weaker dollar and a modest risk-on mood supported the Swiss Franc, which often benefits from safe-haven flows during periods of dollar weakness.

The strong labor data comes ahead of the Federal Reserve’s policy meeting in late September, where officials will decide whether to raise interest rates. The recent jobs report increases the probability of a rate hike in the near future, though traders have scaled back bets following Waller’s comments. The U.S. economy has seen just five outright monthly declines in payrolls over the past 18 months, with the most recent occurring in February.