US unemployment rose in August to its highest level since February 2022 despite more jobs being created than expected, the Labor Department announced Friday.
The unemployment rate stood at 3.8%, up from 3.5% in July. However, 187,000 jobs were created, above the 170,000 expected by analysts.
June and July job creation was revised sharply downward, with a total of 110,000 fewer new jobs than initially announced: 105,000 jobs were created in June versus the 185,000 initially announced, and 157,000 in July instead of 187,000.
“Employment continued its upward trend in health services, recreation and hospitality, social assistance, and construction. Employment in transportation and logistics declined,” the Labor Department detailed in its release.
The increase in the unemployment rate is due to the fact that the economically active population increased by more than half a million people during August.
“Wages have slowed and the unemployment rate has reached its highest level since February 2022 thanks to a strong increase in the labor force,” commented Rubeela Farooqi, chief economist at High Frequency Economics.
Labor shortages since the covid-19 pandemic pushed employers to raise wages, good news for workers but contributing to soaring inflation.
A lasting return of inflation to an acceptable level requires an “easing of labor market conditions,” U.S. Federal Reserve (Fed, central bank) Chairman Jerome Powell said recently.