US Adds 162,000 Jobs in August, Blowing Past Forecasts; AI-Exposed Roles Slump for Young Workers

The US economy added 162,000 jobs in August, easily surpassing the 65,000 gain economists had forecast, new data from the Bureau of Labor Statistics showed Friday. The unemployment rate held steady at 4.1%, according to the report as covered by CNN.

July's job tally was revised up to a gain of 21,000 from an initial loss of 23,000, while June was revised up by 31,000 positions. The August figure was the strongest since March.

A separate private estimate from workforce intelligence firm Revelio Labs painted a more subdued picture. The firm’s Revelio Public Labor Statistics (RPLS) estimated the US added only 36,500 jobs in August, led by Public Administration and Health Care and Social Assistance, while Leisure and Hospitality and Retail Trade lost jobs. Active job postings fell 3% month over month to 18.3 million, 2.2% below August 2025, and advertised salaries in new postings dropped 3.4%.

**AI Exposure Hits Young Workers Hardest**

Revelio Labs’ AI Labor Market Tracker showed that employment in the most AI-exposed occupations has fallen about 6% relative to the least-exposed since November 2022. For workers ages 22 to 25, that gap has reached 19%.

The BLS data, reported by CNN, corroborated a contraction in sectors highly exposed to AI adoption. The information sector shed 23,000 jobs in August and the financial activities sector lost 11,000 jobs.

Revelio Labs cautioned, however, that the data does not signal broad AI-driven displacement. The most AI-exposed firms are recording fewer layoffs than the least-exposed firms, and companies adopting AI continue to expand headcount relative to non-adopters.

“The labor market added very few jobs in August, and opportunities are becoming increasingly uneven,” said Lisa Simon, Chief Economist at Revelio Labs, in the firm’s release. “That is especially visible for younger workers in AI-exposed occupations. But we still do not see evidence of broad AI-driven displacement: highly exposed firms are laying off fewer workers, while firms adopting AI continue to expand.”

**Wage Growth Slows Further**

The BLS report showed wage growth decelerated to an annual rate of 3.1%, a fresh five-year low, and the fourth consecutive month that pay gains lagged overall inflation. Revelio Labs’ data reflected similar easing, with advertised salaries in new postings falling 3.4%.

**Sector Detail and Labor Force**

Job gains in the BLS data were concentrated in leisure and hospitality (+62,000, including 59,200 at restaurants and bars), local government education (+41,900, reversing a large July loss), healthcare and social assistance (+28,400), construction (+22,000), and manufacturing (+16,000). The diffusion index, measuring the breadth of employment changes across 250 industries, rose to 55.6, the highest since December 2024.

The labor force participation rate rose 0.2 percentage points to 61.6%, the first increase in eight months, according to CNN. The number of people working part-time for economic reasons fell to its lowest in nearly two years.

However, the share of unemployed workers job-hunting for 15 weeks or more rose to 43% in August, a five-year high, indicating a “low-churn” labor market that has left many on the outside.

**Market Reaction and Rate Hike Expectations**

The stronger-than-expected report shifted market expectations toward a Federal Reserve rate hike at its mid-September meeting. The two-year Treasury yield jumped after the data release, and the 10-year yield moved slightly higher, CNN reported.

“As one of the final pieces of data ahead of the Fed’s mid-September meeting, it’s not surprising that the market reaction suggests a lean toward rate hike expectations,” Atsi Sheth, Moody’s Ratings chief credit officer, wrote in a note Friday, as quoted by CNN.

Before the report, the odds of a quarter-point rate hike this month were roughly even, according to Zerohedge, which also noted that some economists had anticipated a 55,000 increase. The actual 162,000 gain far exceeded that pre-release estimate.

Friday’s data helps ease concerns that the job market was slowing rapidly, Daniel Zhao, chief economist at Glassdoor, told CNN. “This jobs report did blow expectations out of the water,” Zhao said. “We are definitely getting a bit of whiplash here, where it feels like the reports are alternating between good and bad; but, overall, we’ll take the win.”

August’s stronger-than-expected jobs report quells fears of a collapsing labor market, but economists at Pantheon Macroeconomics described the pick-up as “payback after two very weak months and the reversal of a seasonal adjustment distortion to education jobs, rather than a sustainable shift to a faster growth rate,” CNN reported.

All eyes now turn to the August Consumer Price Index, due next Friday, which will be in even sharper focus as the final major data point before the Fed’s policy meeting.