US Wage Growth Remains Stable

The US labor market sent strong signals in August 2026. In addition to Nonfarm Payrolls surging by 162,000 jobs—well above the market expectation of 56,000—monthly wage growth remained stable. Average Hourly Earnings rose 0.3% month-over-month in August, matching market forecasts and exceeding the revised 0.2% increase seen in July.

Average hourly earnings for all private-sector workers rose by 10 cents to US$37.75. Meanwhile, wages for production and non-supervisory workers increased by 11 cents, or 0.3%, to US$32.53 per hour. The data indicates that monthly wage pressures persist, though they did not deliver a surprise comparable to the headline NFP figure.

On an annual basis, however, growth in Average Hourly Earnings slowed to 3.1% from 3.2% in July. This figure represents the slowest growth rate since May 2021, although it remains slightly above the market expectation of 3.0%. The slowdown in annual wage growth signals that labor-driven inflationary pressures are gradually easing.

These wage figures complement the broader employment report, which showed an NFP gain of 162,000, an unemployment rate holding steady at 4.1%, a labor force participation rate rising to 61.6%, and a U-6 unemployment rate falling to 7.7%. This combination depicts a US labor market that remains solid but shows no signs of accelerating wage pressure.

For the Federal Reserve, the report presents a complex picture. Strong job creation could justify maintaining a tight monetary policy, yet the slowdown in annual wage growth reduces the urgency for aggressive interest rate hikes. Therefore, the market will now focus on US CPI and PPI data to determine whether the strong NFP figures are sufficient to prompt the Fed to raise interest rates again in September.

Source: Newsmaker.id