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← Economic Fallout

U.S. Job Market Rebounds While Inflation Pressures Households and Stocks

Confirmed1 source · Sep 5, 2026

August employment surged past expectations, but rising fuel and shipping costs are straining consumer budgets and constraining wage growth ahead of midterm elections.

U.S. Job Market Rebounds While Inflation Pressures Households and Stocks
Image via AP

What happened

U.S. employers added 162,000 jobs in August, far exceeding economist expectations of 65,000. Job openings rose slightly to 7.27 million in July from 7.18 million in June, and layoffs fell. However, average hourly wage growth slowed to 3.1% year-over-year, the weakest increase since May 2021. Separately, diesel fuel hit a record $5.85 per gallon, and mortgage rates climbed to 6.71% on 30-year fixed loans, the highest in over a year. Stock markets fell on the news, with the S&P 500, Dow, and Nasdaq struggling to finish the week positive as investors anticipated potential Federal Reserve rate hikes.

Context

The strong jobs report arrives two months before midterm elections, with President Trump highlighting the data. However, inflation has dominated economic sentiment, with higher fuel prices tied to the fighting with Iran that disrupted the world's flow of fuel. These elevated energy costs are trickling through supply chains—higher diesel means increased transportation and shipping costs that businesses are passing to consumers through added fees and higher grocery prices, particularly for perishables. Rising mortgage rates further squeeze households by limiting purchasing power in an already sluggish housing market. Voters are increasingly frustrated by higher costs coupled with meager pay raises that have made rising prices more painful for many.