The US added 162,000 jobs in August 2026 and unemployment held at 4.1 percent, its lowest reading in 13 months. Hiring is slow because the labor force is barely growing, not because employers are cutting. Layoffs run at 1.0 percent of employment a month, openings top 7.2 million, and there are 0.95 unemployed people for every opening.
Sources: BLS Employment Situation, August 2026, released September 4, 2026; BLS JOLTS, July 2026, released September 1, 2026. Seasonally adjusted.What did the August jobs report say?
BLS released the August 2026 Employment Situation on September 4. Nonfarm payrolls rose 162,000, against an average gain of only 31,000 a month over the prior 12 months. June was revised up to a gain of 31,000, and July, first reported as a loss of 23,000, was revised to a gain of 21,000. Together the revisions added 55,000 jobs. Unemployment stayed at 4.1 percent, down from 4.5 percent in November 2025, and participation rose to 61.6 percent.
| Measure | August 2026 | Note |
|---|---|---|
| Nonfarm payroll change | +162,000 | Prior 12 month average +31,000 |
| Unemployment rate | 4.1 percent | Unchanged on the month; 4.5 percent in November 2025 |
| Unemployed persons | 7.0 million | Long term unemployed 1.9 million, 27.0 percent of the total |
| Labor force participation | 61.6 percent | Up 0.2 point |
| U6 underutilization rate | 7.7 percent | Part time for economic reasons 4.4 million, down 414,000 |
| Average hourly earnings, all private | $37.75 | Up 3.1 percent over the year |
| Average hourly earnings, production and nonsupervisory | $32.53 | Up 3.3 percent over the year |
| Manufacturing workweek | 40.5 hours | Overtime 3.1 hours a week |
| Initial jobless claims | 206,000 | Week ending September 5, 2026; four week average 206,000 |
Pay grew a little faster for the people on the floor than for the workforce as a whole. Production and nonsupervisory hourly earnings rose 3.3 percent to $32.53, a tenth of a point ahead of the all employee figure. But the Consumer Price Index rose 3.4 percent over the same 12 months, with gasoline up 27.4 percent, so real average hourly earnings fell 0.3 percent (BLS Real Earnings, August 2026). A paycheck buys slightly less than it did a year ago.
Why is job growth low if layoffs are also low?
Because the supply of workers is not growing. The July JOLTS report, released September 1, shows 7.271 million job openings (a 4.4 percent rate), 5.1 million hires (3.2 percent), 3.056 million quits (1.9 percent) and 1.7 million layoffs and discharges (1.0 percent). All four are monthly rates. Divide the 6.9 million people unemployed in July by 7.271 million openings and you get 0.95 unemployed people per opening. That is a market with more chairs than people to fill them.
The foreign born labor force fell 379,000, or 1.2 percent, between August 2025 and August 2026 (BLS Table A7, not seasonally adjusted). Indeed Hiring Lab counts the total labor force down about 700,000 in 2026 to date and argues that roughly 80,000 jobs a month is now enough to lower unemployment. Fed Chair Kevin Warsh made the same point at Jackson Hole on August 28: "when labor supply is barely growing, monthly job gains are naturally going to run low." The federal funds target range has sat at 3.50 to 3.75 percent since December 2025, three FOMC members dissented in favor of a hike on July 29, and the committee meets again September 15 to 16.
Sources: BLS JOLTS, July 2026, Tables 1 and 4; BLS Table A7, August 2026; Indeed Hiring Lab, September 10, 2026; Federal Reserve, Chair Warsh speech, August 28, 2026, and FOMC statement, July 29, 2026.Where is hiring strong and where is it weak?
| Industry | 12 month change to August 2026 | Level, August 2026 |
|---|---|---|
| Health care | +378,500 (+2.1 percent) | 18,520,700 |
| Construction | +120,000 (+1.5 percent) | 8,359,000 |
| Temporary help services | +36,200 (+1.5 percent) | 2,519,500 |
| Fabricated metal products | +25,000 (+1.7 percent) | 1,460,800 |
| Manufacturing, all | +23,000 (+0.2 percent) | 12,638,000 |
| Machinery | +14,000 (+1.3 percent) | 1,097,300 |
| Motor vehicles and parts | down 400 (flat) | 962,800 |
| Food manufacturing | down 20,400 (down 1.1 percent) | 1,764,600 |
| Transportation and warehousing | down 51,500 (down 0.8 percent) | 6,606,300 |
| Federal government | down 242,000 (down 8.3 percent) | 2,674,000 |
Two more signals point the same way. Manufacturing job openings were 580,000 in July 2026 against 428,000 a year earlier, up 36 percent, and durable goods openings alone rose 76,000 in the month (BLS JOLTS Table 1). The ISM Manufacturing PMI read 54.6 in August, an eighth straight month of expansion, with its employment index at 51.2 (ISM, September 1, 2026). Factories are busy and posting jobs. They are adding heads slowly: the manufacturing workweek is 40.5 hours with 3.1 hours of overtime, which is how a plant covers demand without a new hire.
Construction unemployment fell to a record low 3.1 percent in August (AGC analysis of BLS data, not seasonally adjusted). The Federal Reserve's Beige Book of September 2 put it plainly: "Skilled trades and technical workers were difficult to find." One Chicago District contact said that "without data centers, construction would be in a recession."
Whose pay is rising fastest?
| Industry, production and nonsupervisory workers | August 2025 | August 2026 | Change |
|---|---|---|---|
| Utilities | $46.33 | $49.94 | +7.8 percent |
| Construction | $37.50 | $39.36 | +5.0 percent |
| Durable goods manufacturing | $30.83 | $32.29 | +4.7 percent |
| Transportation and warehousing | $30.13 | $31.46 | +4.4 percent |
| Manufacturing, all | $29.10 | $30.37 | +4.4 percent |
| Total private | $31.49 | $32.53 | +3.3 percent |
| Retail trade | $21.71 | $22.41 | +3.2 percent |
| Education and health services | $32.95 | $33.31 | +1.1 percent |
Blue collar pay is outrunning white collar pay. Construction, durable goods and transportation production workers gained real purchasing power over the year; retail, wholesale and health support workers lost ground. The Atlanta Fed Wage Growth Tracker puts job switchers at 5.0 percent median wage growth versus 3.6 percent for stayers in August 2026 (three month average). Changing jobs still pays, which is why pay driven turnover continues even with quits at a low 1.9 percent.
One cost is moving faster than any wage. On highway diesel averaged $5.967 a gallon on September 7, 2026, up $2.20 from a year earlier (EIA weekly retail prices), a direct result of the disruption in the Strait of Hormuz. For anyone who ships product, that reaches freight rates through fuel surcharges within one to two weeks.
What this means if you hire
Plan for competition, not slack. With 0.95 unemployed people per opening and manufacturing openings up 36 percent, a posting alone will not fill a floor.
- Set production pay bands off the durable goods figure (up 4.7 percent), not the all private figure (up 3.3 percent), or you will lose people to the plant next door.
- Skilled trades and maintenance are where the Fed's contacts report the largest raises. Budget a retention adjustment before a resignation forces one.
- If the workweek is above 40 hours with steady overtime, temp to hire adds heads this month without a permanent commitment. Request a quote and we respond within one business day.
What this means if you work
If you are employed, the market is stable: layoffs at 1.0 percent a month are low by any historical standard. If you are looking, there are roughly as many openings as job seekers.
- Job switchers earned 5.0 percent raises versus 3.6 percent for stayers. A well timed move is still the fastest way to outrun 3.4 percent inflation.
- Construction, durable goods manufacturing and transportation are the sectors where production pay beat inflation over the past year.
- Factories are running 40.5 hour weeks with overtime. Ask about shift premiums and overtime availability, not just the base rate.
Need people on the floor before the next jobs report? Tell us the role, the shift and the start date.
Book a meeting Call (734) 552-5731What comes next?
- Tuesday and Wednesday, September 15 to 16. FOMC meeting; statement at 2:00 pm ET on September 16 with a Summary of Economic Projections (Federal Reserve calendar).
- Friday, September 18, 10:00 am ET. BLS State Employment and Unemployment for August. Feeds our state hiring tracker.
- Tuesday, September 29, 10:00 am ET. BLS JOLTS for August.
- Thursday, October 1. Challenger job cuts report (5:30 am ET) and ISM Manufacturing PMI for September.
- Friday, October 2, 8:30 am ET. BLS Employment Situation for September. This brief is refreshed the same morning.
- Wednesday, October 14, 8:30 am ET. CPI and Real Earnings for September.
Sources
- BLS, The Employment Situation, August 2026, released September 4, 2026. bls.gov/news.release/empsit.nr0.htm
- BLS, Employment Situation Table B1, employees on nonfarm payrolls by industry. bls.gov/news.release/empsit.t17.htm
- BLS, Employment Situation Table B8, average hourly earnings of production and nonsupervisory employees. bls.gov/news.release/empsit.t24.htm
- BLS, Employment Situation Table A7, employment status of the foreign born and native born populations. bls.gov/news.release/empsit.t07.htm
- BLS, Job Openings and Labor Turnover Survey, July 2026, released September 1, 2026. bls.gov/news.release/jolts.nr0.htm and Table 1 bls.gov/news.release/jolts.t01.htm
- BLS, Consumer Price Index, August 2026, released September 11, 2026. bls.gov/news.release/cpi.nr0.htm; Real Earnings, August 2026. bls.gov/news.release/realer.nr0.htm
- US Department of Labor, weekly unemployment insurance claims. oui.doleta.gov/unemploy/claims.asp
- Federal Reserve, FOMC statement, July 29, 2026. federalreserve.gov; Chair Warsh, Jackson Hole speech, August 28, 2026. federalreserve.gov
- Federal Reserve, Beige Book national summary, September 2, 2026. minneapolisfed.org
- Federal Reserve Bank of Atlanta, Wage Growth Tracker, August 2026. atlantafed.org
- Institute for Supply Management, Manufacturing PMI, August 2026, released September 1, 2026. prnewswire.com
- Associated General Contractors of America, construction employment analysis, September 4, 2026. news.agc.org
- Indeed Hiring Lab, "Interpreting the labor market in a new era of constrained labor supply," September 10, 2026. hiringlab.indeed.com
- US Energy Information Administration, weekly retail gasoline and diesel prices, September 7, 2026. eia.gov/petroleum/gasdiesel
- BLS release schedules, September to November 2026. bls.gov/schedule; Federal Reserve FOMC calendar. federalreserve.gov
Production note: drafted from the primary sources listed above with AI assistance, then reviewed and edited by Kenneth Cuzelis before publication. Read how we source and grade every number. Corrections: info@c3workforce.com or (734) 552-5731.
