Hiring was unexpectedly strong in August, as employers pushed past uncertainty related to the war in Iran, tariffs and artificial intelligence to expand their payrolls.

Employers added 162,000 jobs last month, the Labor Department reported on Friday, and the unemployment rate held steady at 4.1%.

Job gains for June and July were revised up by 55,000, adding to the brighter picture of the labor market. Growth in August was especially strong in the leisure and hospitality sector, which added 62,000 positions.

“This is a summer heat wave,” said Diane Swonk, chief economist at KPMG.

The report will reinforce the Federal Reserve’s focus on stamping out inflation when officials there consider whether to raise rates later this month.

Here’s What Else to Know:

Wages cool: Wage growth continued to cool in August, with average hourly earnings rising 3.1% compared with a year ago. That was the slowest pace since the depths of the pandemic and lower than the inflation rate.

Stagnation situation: Despite signs in the spring that hiring was gaining momentum, there were concerns that the labor market was reverting to a ho-hum state. Job openings and the rate of hiring have stalled even as layoffs remain exceedingly low. This report, however, is an encouraging sign that the fragile labor market may be on sturdier footing.

Fewer workers: Employers have been contending with a shrinking supply of available workers because of an aging population and restrictive immigration policies. Hundreds of thousands of people from Haiti and other countries have also lost their ability to work legally following the Trump administration’s move to end their temporary protected status.

Open wallets: Despite higher gas prices brought on by the war in Iran, consumer spending remained surprisingly resilient in recent months. That continued demand for goods and services has helped keep the labor market afloat.

Dour outlook: Though the labor market has stayed steady, people seeking employment, including recent college graduates, have had trouble finding work. Wages are failing to keep up with inflation, which has been lifted anew by those higher gas prices. These dynamics could help explain why so many Americans are downbeat about the economy.

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This article originally appeared in The New York Times.

By Sydney Ember/Tierney L. Cross
c. 2026 The New York Times Company