US hiring surge strengthens case for Federal Reserve rate hike

The US economy added 162,000 jobs in August, nearly tripling what forecasters had penciled in. Consensus estimates had clustered around 55,000 to 65,000 new nonfarm payroll positions, making this the kind of miss that forces Wall Street to quietly update its spreadsheets and publicly update its talking points. The Bureau of Labor Statistics report, released September 4, also revealed that prior months’ figures were revised upward by a combined 55,000 jobs. The unemployment rate held steady at 4.1%, and labor-force participation ticked up to 61.6%. Where the jobs landed Leisure and hospitality led the charge, adding 62,000 positions. Within that category, food services and drinking establishments alone accounted for 59,000 jobs. Local government education contributed 42,000 new roles. Healthcare, construction, and manufacturing all posted positive numbers as well. What it means for the Fed The September 15-16 Federal Open Market Committee meeting just got a lot more interesting. Market-implied probability of a rate hike at that meeting has climbed to roughly 60%, up from the 50-55% range that prevailed before the jobs data dropped. Treasury yields rose in response. The US dollar str...