America's jobs scare recedes (axios.com)

The labor market looks considerably healthier than it did at the start of the summer. Why it matters: Friday morning's jobs report recast the last two months as a period of modest job growth rather than of outright deterioration, capped by a gain last month that was more than triple what economists expected. The labor market is weathering the Iran conflict and an AI-driven transformation of the economy with surprisingly little damage, at least for now. For the Federal Reserve, the report puts inflation even more squarely in focus — with less evidence that the labor market is too fragile to hold up in the event of higher interest rates. What they're saying: "August turned the heat back up on the job market," Glassdoor chief economist Daniel Zhao wrote Friday morning. But Zhao noted that "the data has swung hard from month to month, and revisions keep rewriting what we thought we knew, so the underlying trend is tough to read." Data: Bureau of Labor Statistics ; Chart: Courtenay Brown/Axios Driving the news: Employers added a surprisingly strong 162,000 jobs in August, the biggest gain since March. The unemployment rate was unchanged at 4.1%. Paired with positive revisions to June and July numbers, the release lifts three-month average job gains to 71,000, from just 20,000. June and July payrolls were revised up by a combined 55,000, a revision that flipped July from a 23,000-job loss to a 21,000-job gain . Between the lines: What looked like a labor market shedding jobs this summer now looks like one that slowed but kept expanding. August's headline was boosted by 42,000 jobs added in local government education, which largely reversed July's decline. That suggests some of the summer's apparent weakness — and August's subsequent rebound — reflected seasonal volatility rather than a sudden shift in labor demand. Zoom in: Bars and restaurants added 59,000 jobs in August, a surprising result considering that the World Cup ended in July and that it seemed plausible there would be a falloff in the sector's employment. Manufacturing added another 16,000 jobs, continuing an upward trend in employment that started late last year. The jobs contraction in the information sector — which includes tech infrastructure, publishing and media jobs — deepened, shedding 23,000 jobs in August and 115,000 over the past year. By the numbers: The unemployment rate held at 4.1% (though the unrounded rate edged up to 4.14% from 4.09%). The details of the household survey were promising. The labor force participation rate rebounded to 61.6%, reversing some of a steep two-month slide in which nearly 1 million people had exited the workforce. Still, participation remains 0.7 point below a year ago. The share of prime-age Americans — those aged between 25 and 54 — with a job held at 80.4% in August, still below its recent high of 80.8% in May. What to watch: August may help clarify whether the recent hiring slowdown reflected fewer workers available or less appetite among empl