The unemployment rate rose from 3.5% to 3.8%, the highest level since Feb. 2022 though still low by historical standardsThe nation's employers added a solid 187,000 jobs in August in a sign of a still-resilient labor market despite the high interest rates the Federal Reserve has imposed.
A decelerating job market could help shift the economy into a slower gear and reassure the Fed that inflation will continue to decelerate. The Fed’s streak of 11 interest rate hikes have helped slow inflation from a peak of 9.1% last year to 3.2% now. Given signs that inflation has continued to ease, many economists think the Fed may decide no further rate hikes are necessary.
Optimism about a soft landing has been growing. The economy, though growing more slowly than it did in the boom that followed the pandemic recession of 2020, has defied the squeeze of increasingly high borrowing costs. The gross domestic product — the economy’s total output of goods and services — rose at a respectable 2.1% annual rate from April to June. Consumers continued to spend, and businesses increased their investments.