The US economy added 162,000 jobs in August, far exceeding economist expectations and providing fresh evidence that the labor market remains stable heading into the fall, with particular implications for Texas’s booming economy.
Economists surveyed by Dow Jones had expected overall hiring of just 53,000 roles and a steady unemployment rate. The unemployment rate remained unchanged at 4.1 percent. June’s numbers were revised up by 11,000 to 31,000, while July was revised up sharply by 44,000 to 21,000, erasing what had initially been reported as a negative jobs month.
The strong August report carries particular weight for Texas, which has been a national leader in job growth throughout 2026. The state’s energy sector, construction industry, and service economy have all contributed to its outperformance relative to national trends.
Among sectors that saw job growth nationally, employment at restaurants and bars rose by 59,000, while local government education gained 42,000 as teachers returned to school. The construction sector added 22,000 roles, a positive sign for Texas’s ongoing infrastructure expansion.
However, information technology employment declined by 23,000 nationally, with losses concentrated in companies providing computing infrastructure, data processing, and web hosting. Texas’s tech corridor around Austin has been somewhat insulated from this trend due to continued investment in AI-related infrastructure.
Wage growth remained a concern, at 3.1 percent year-over-year in August, unchanged from July. ‘The fly in the ointment’ is that ‘with oil prices poised to nudge inflation higher, real wages remain vulnerable during the balance of the year,’ said Jennifer Timmerman of Wells Fargo.
For Texas, the energy price dynamic cuts both ways. While higher oil prices push up consumer costs, they also drive hiring in the state’s oil and gas sector. Brent crude traded around $95 per barrel on Friday, up nearly 20 percent since August 4, reflecting the ongoing disruption from the Iran conflict.
The report slightly increased market odds for a September rate hike by the Federal Reserve, though most market watchers believe next week’s inflation report will be pivotal. President Donald Trump called the report ‘great’ and urged the Fed to ‘lower the interest rates’ immediately.
Average job growth so far this year is tracking at 80,000 per month, above 2025’s 10,000 average but well below 2023 and 2024 averages, suggesting the labor market is stabilizing but not booming.
Sources: NBC News, Bureau of Labor Statistics
