US employers added 162,000 nonfarm jobs in August, well above the market forecast of 56,000, while previous figures were revised up by a combined 55,000. July payrolls were revised from a decline of 23,000 to an increase of 21,000. Analysts said the underlying gain was closer to 60,000 after excluding a rebound in leisure and hospitality employment and one-off effects in government education, indicating that the labor market was less robust than the headline figure suggested. The unemployment rate held at 4.1%, the labor-force participation rate rose to 61.6%, and the U6 broad unemployment rate fell from 7.9% to 7.7%, pointing to improved labor-market quality as returning workers were absorbed by employers. Average hourly earnings growth slowed to 3.1% year over year from 3.2%, below July's 3.4% CPI growth, suggesting the labor market has not become overheated again. GF Macro said the report challenged both an employment collapse narrative and a renewed overheating narrative, while increasing the probability of a rate hike later this year because labor-market resilience reduces concerns about further tightening. The September rate decision will still depend mainly on the August inflation data. After the release, FedWatch-implied odds of a September hike rose from 50% to 58.6%; two-year and 10-year US Treasury yields increased 4 basis points and 1 basis point to 4.37% and 4.78%, respectively. Major US stock indexes closed slightly lower, while the Philadelphia Semiconductor ETF SOXX rose 3% as AI hardware stocks rebounded.