US added 315,000 jobs in August as strong market defies signs of worsening economy

The US added another 315,000 jobs in August as the jobs market remained strong amid signs of a worsening economy.

The US jobs market lost 22m jobs in early 2020 at the start of the pandemic but roared back after the Covid lockdowns ended. It has remained strong despite four-decade-high rates of inflation and slowing economic growth. In July, the US unexpectedly added 526,000 new jobs, restoring employment to pre-pandemic levels.

The unemployment rate ticked up to 3.7% in August from 3.5% in July but is still close to a 50-year low. The report also showed more people came off the sidelines in August and started looking for work.

The central bank has sharply increased interest rates in the hope of cooling the economy and bringing down prices.

Last week the Fed chair, Jerome Powell, made clear the Fed intends to keep raising rates sharply as the central bank struggles to tamp down inflation. His speech triggered a meltdown on Wall Street, with the Dow Jones index losing 1,000 points. The latest jobs report is the last to be released before the Fed meets again in September.

There are mixed signals about the health of the job market. Large employers including Ford and Walmart have announced plans for widespread layoffs, and 50% of businesses surveyed by PriceWaterhouseCoopers last month said they were reducing their headcount or planning to.