The U.S. added 187,000 jobs in August, reflecting a slow yet resilient economy despite the Federal Reserve’s high interest rates, according to a report by the Associated Press.

While this marks an improvement from July’s revised gain of 157,000 jobs, it signals a deceleration in hiring compared to last year’s gains.

Although the unemployment rate rose from 3.5% to 3.8%, it did so for a promising reason: 736,000 people entered the job market in search of employment, the highest number since January. This increase contributed to the proportion of Americans with jobs or actively seeking them, reaching 62.8%, the highest since February 2020, before the pandemic.

The Federal Reserve’s 11 interest rate hikes have aided in reducing inflation from 9.1% last year to 3.2% currently. A decelerating job market could help ease inflation concerns and may lead the Fed to reconsider further rate hikes.

Average hourly pay in August rose by only 0.2%, which could help alleviate inflationary pressures. However, the Fed is still aiming for a “soft landing,” where rate hikes manage to curb inflation without causing a recession.

Despite the cooling job market, layoffs have been minimal. The number of Americans applying for unemployment benefits fell for the third consecutive week.The economy’s trajectory remains uncertain, with some economists predicting a recession in early 2024 as the full impact of the Fed’s rate hikes is absorbed.

Nevertheless, the labor market’s gradual moderation is seen as a step toward achieving the Fed’s goals.