STORY: U.S. job growth rose slightly more than expected in August, as the Labor Department's closely watched employment report on Friday showed employers hired 315,000 workers last month.
But wage growth slowed and the unemployment rate ticked up to 3.7%, which could ease pressure on the Federal Reserve to deliver a third 75 basis point interest rate hike at its policy meeting later this month.
Jesse Wheeler is an analyst with Morning Consult.
"This jobs report will be a very welcome sign for Federal Reserve policymakers. Labor force participation increased, which will relieve some of that pressure on a very tight labor market. And, at the same time, we're not really seeing too many layoffs. Wage growth has slowed somewhat. So all of these are, you know, very good signs that those increases in interest rates are slowing the job market and the economy but are not taking a very heavy toll on the labor market as of yet."
U.S. stocks opened higher on the news, as the jobs report lifted investors' hopes that the pace of interest rate hikes could ease.
While the unemployment rate rose, it came as more than 780,000 workers entered the job market, pushing the size of the labor force to a record high.
The broad increase in hiring last month was led by the professional and business services industry. The healthcare sector also saw a large increase in jobs.
But leisure and hospitality payrolls slowed sharply. Employment in that industry remains more than a million jobs below the level it was at before the global health crisis.