US Employers Add 315,000 Jobs as More Workers Join Labor Force

US employers added a healthy number of jobs in August and a steady stream of people entering the labor force pushed the unemployment rate higher, consistent with a job market that is coming more into balance and offering mixed implications for the Federal Reserve.

Nonfarm payrolls increased 315,000 last month following a revised 526,000 advance in July, a Labor Department report showed Friday. The unemployment rate unexpectedly rose to a six-month high of 3.7%, the first increase since January, as the participation rate climbed.

Economists projected an almost 300,000 gain in payrolls and a 3.5% jobless rate, based on the median estimates in a Bloomberg survey.

Despite moderating job growth, the still-solid employment gain points to a healthy appetite for labor amid high inflation, rising interest rates and an uncertain economic outlook. Such demand, along with repeated pay raises, continues to underpin consumer spending.

However, the jump in participation, which could lead to a further cooling in monthly wage growth, added to signs that inflation pressures are slowing. That’s welcome news for the Fed as it debates its next rate decision, and led traders to pare bets for a third-straight 75-basis-point hike after the report. It also puts more focus on consumer price data due ahead of the September policy meeting.