Research
September 04, 2026
Total U.S. jobs
U.S. job growth soared in August, up by 162,000
Nonfarm payroll employment increased by 162,000 in August, more than triple the consensus forecast of roughly 50,000. In addition, previously reported payroll gains for June and July were revised higher by a combined 55,000. Through the first eight months of 2026, the U.S. economy has added 643,000 nonfarm jobs on net, with employment expanding in seven of the eight months. Moreover, restaurants were the largest source of job growth for the month, a sign that the sector remains resilient and that consumers continue to prioritize eating out.
Taken together, these data suggest that while labor market conditions softened earlier this summer, employment growth remains resilient, mirroring the broader economy. Continued gains in jobs and wages are critical to supporting household spending, which remains the primary engine of economic growth.
Restaurant operators are closely watching these developments as they contend with softer-than-desired consumer demand. A stable labor market should help sustain consumer spending and restaurant traffic in the months ahead despite challenges from higher gasoline prices and subpar consumer confidence readings.
That said, downside risks remain elevated amid ongoing geopolitical uncertainty and persistent inflationary pressures. These crosscurrents continue to complicate the Federal Reserve's policy outlook as policymakers weigh inflation concerns against signs of a moderating labor market. However, this report likely increases the odds of a rate hike at the Federal Open Market Committee's September 15-16 meeting, particularly given persistent inflationary pressures. Even if the FOMC does not move in September, there will likely be at least one interest rate increase this year.
While labor force participation remained weak, it moved in a positive direction in August. The civilian labor force increased from 169.09 million in July to 169.78 million in August, although it remains down by 2.40 million over the first eight months of 2026. As a result, the labor force participation rate edged up from 61.4% in July, its lowest level since February 2021, to 61.6% in August.
Despite this month's improvement, the broader trend suggests that a significant number of potential workers have moved to the sidelines, continuing to constrain labor availability. As a result, many employers, including restaurant operators, are likely to face ongoing challenges recruiting and retaining workers.
At the same time, the unemployment rate edged was unchanged at 4.1% in August, continuing to be the lowest since June 2025. This suggests that the labor market remains relatively healthy by historical standards, even with worries about overall participation. While the rate remained the same, the number of unemployed individuals rose from 6.92 million in July, the lowest level since January 2025, to 7.03 million.
On the wage front, average hourly earnings for private-sector production and nonsupervisory workers increased 0.3% in August to $32.53, rising 3.3% over the past 12 months. Overall, wage growth remains relatively solid by historical standards, suggesting that workers continue to see income gains that can help support consumer spending.
Job growth in August was mostly higher, led by strength at restaurants. Other segments with employment strength for the month included local government, private education and health services, construction, and manufacturing, among others. Below is a detailed breakdown of August’s employment changes by sector, ranked from highest to lowest:
Taken together, these data suggest that while labor market conditions softened earlier this summer, employment growth remains resilient, mirroring the broader economy. Continued gains in jobs and wages are critical to supporting household spending, which remains the primary engine of economic growth.
Restaurant operators are closely watching these developments as they contend with softer-than-desired consumer demand. A stable labor market should help sustain consumer spending and restaurant traffic in the months ahead despite challenges from higher gasoline prices and subpar consumer confidence readings.
That said, downside risks remain elevated amid ongoing geopolitical uncertainty and persistent inflationary pressures. These crosscurrents continue to complicate the Federal Reserve's policy outlook as policymakers weigh inflation concerns against signs of a moderating labor market. However, this report likely increases the odds of a rate hike at the Federal Open Market Committee's September 15-16 meeting, particularly given persistent inflationary pressures. Even if the FOMC does not move in September, there will likely be at least one interest rate increase this year.
While labor force participation remained weak, it moved in a positive direction in August. The civilian labor force increased from 169.09 million in July to 169.78 million in August, although it remains down by 2.40 million over the first eight months of 2026. As a result, the labor force participation rate edged up from 61.4% in July, its lowest level since February 2021, to 61.6% in August.
Despite this month's improvement, the broader trend suggests that a significant number of potential workers have moved to the sidelines, continuing to constrain labor availability. As a result, many employers, including restaurant operators, are likely to face ongoing challenges recruiting and retaining workers.
At the same time, the unemployment rate edged was unchanged at 4.1% in August, continuing to be the lowest since June 2025. This suggests that the labor market remains relatively healthy by historical standards, even with worries about overall participation. While the rate remained the same, the number of unemployed individuals rose from 6.92 million in July, the lowest level since January 2025, to 7.03 million.
On the wage front, average hourly earnings for private-sector production and nonsupervisory workers increased 0.3% in August to $32.53, rising 3.3% over the past 12 months. Overall, wage growth remains relatively solid by historical standards, suggesting that workers continue to see income gains that can help support consumer spending.
Job growth in August was mostly higher, led by strength at restaurants. Other segments with employment strength for the month included local government, private education and health services, construction, and manufacturing, among others. Below is a detailed breakdown of August’s employment changes by sector, ranked from highest to lowest:
- Leisure and hospitality: +62,000 (eating and drinking places: +59,200)
- Local government: +50,000
- Private education and health services: +29,000
- Construction: +22,000
- Manufacturing: +16,000
- Trade, transportation, and utilities: +16,000 (retail trade: +1,400)
- Professional and business services: +10,000
- Mining and logging: +3,000
- Other services: +3,000
- Federal government: -5,000
- State government: -10,000
- Financial activities: -11,000
- Information: -23,000