Total nonfarm payroll employment rose by 162,000 in August and the unemployment rate held at 4.1%, the Bureau of Labor Statistics reported September 4. The gain ran far ahead of the roughly 53,000 economists had forecast and towered over the prior 12-month average of 31,000. The bureau also revised the two preceding months upward by a combined 55,000, turning July from a reported loss of 23,000 jobs into a gain of 21,000.
For lessors, the detail beneath the headline number matters more than the number itself. Construction added 22,000 jobs in August, with nonresidential specialty trade contractors accounting for 8,000 of them. Manufacturing added 16,000 and has grown steadily since December 2025, led by machinery and fabricated metal products at 6,000 each. Transportation and warehousing added 5,000, mining and logging added 3,000 and health care added 13,000, with home health care and hospitals leading those gains.
Those are the end markets that drive equipment demand. Hiring in nonresidential construction trades and in machinery manufacturing tends to precede or accompany capital spending on the yellow iron, machine tools and material handling equipment that fill lessors’ portfolios. Health care hiring carries similar weight for the medical equipment finance segment.
The transportation figure aligns with separate data pointing in the same direction. ACT Research reported September 4 that preliminary Class 8 net orders reached 16,800 units in August, up 31% year over year, while Classes 5-7 orders totaled 20,000 units, up 37%. Carter Vieth, research analyst at ACT Research, said demand for new equipment “remains strong, supported by meaningfully improved freight rates,” and noted that carrier profit margins reached a nearly three-year high in the second quarter. Orders fell 35% month over month on a seasonally adjusted basis, but ACT attributed the drop to oversubscribed 2026 backlogs with no available build slots and to customers waiting for September orderboards to open rather than to softening demand.
The complication is on the funding side. Rate-futures traders increased their bets on a September rate increase after the payroll release, according to market reports, reversing an expectation that had been building through the summer that the Federal Reserve’s next move would be a cut. The Federal Open Market Committee next meets September 15-16.
An increase, or even an extended pause at current levels, would keep pressure on lessors’ cost of funds. Portfolios funded on floating-rate warehouse lines would feel it first. Bank-affiliated lessors and independents that fund through the capital markets would face the question of how much of an increase they can pass through before pricing themselves out of deals their end markets are otherwise ready to do.
The two halves of the report point in opposite directions for the same balance sheet. Stronger employment in construction, manufacturing and transportation supports origination volume and, at the margin, credit quality. A firmer rate path narrows spreads on that volume.
Wage growth continued to trail inflation. Average hourly earnings rose 0.3% in August to $37.75 and were up 3.1% from a year earlier, below the 3.4% annual increase in the consumer price index reported for July, the most recent CPI reading available.
Whether August marks a genuine reacceleration in the labor market or a single strong month against a weak 12-month trend will not be clear until the September report. Lessors setting fourth-quarter pricing will have to decide before then.
