After reporting weaker than expected job growth in the previous month, the Labor Department released a report on Friday showing employment in the U.S. jumped by more than expected in the month of August.
The Labor Department said non-farm payroll employment surged up by 201,000 jobs in August after climbing by a downwardly revised 147,000 jobs in July.
Economists had expected employment to increase by about 191,000 jobs compared to the addition of 157,000 jobs originally reported for the previous month.
The bigger than expected increase in employment reflected notable job growth in the professional and business services, healthcare, wholesale trade, transportation and warehousing, and mining sectors.
Despite the stronger than expected job growth during the month, the unemployment rate held at 3.9 percent in August compared to expectations for a drop to 3.8 percent.
The unemployment rate came in flat as the household survey measure of employment showed a slump of 423,000 persons and the labor force shrank by 469,000 persons.
The report also said average hourly employee earnings rose by $0.10 or 0.4 percent to $27.16, reflecting the biggest monthly increase seen last December.
The annual rate of average hourly employee earnings growth subsequently accelerated to 2.9 percent in August from 2.7 percent in July. Wage growth had been expected to remain unchanged.
"This report is strong throughout and with the economy likely to grow more than 3% again in 3Q18 it will keep the Fed hiking interest rates with another move in September with a further increase in December," said James Knightley, Chief International Economist at ING.