Markets forecast 25 bps Fed rate hike after strong US jobs data

  • U.S. employers added 162,000 jobs in August, exceeding expectations of 55,000.
  • June and July payroll estimates were revised higher by a combined 55,000.
  • Markets increased pricing for a September Federal Reserve rate hike after the report.

U.S. employers added 162,000 jobs in August, exceeding expectations of 55,000, while the unemployment rate held at 4.1%. Payroll estimates for June and July were revised up by a combined 55,000, reinforcing evidence of a resilient labor market as the Federal Reserve weighs its next policy decision. Markets increased expectations for a September rate rise, although economists said next week's consumer and producer inflation data will remain pivotal. The Fed's preferred PCE price index has stayed above its 2% target for 65 consecutive months, while the stronger jobs report weighed on U.S. stocks and Treasury bonds.

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