The government counted 162,000 new jobs in August, about 3 times what anyone expected, and within an hour the markets had decided this was bad news. That reaction tells you something about how we measure an economy. The same morning, a gallon of diesel crossed $5.85, the highest price ever recorded. I want to put those two facts side by side, because the Church has a specific test for whether an economy is working, and it is neither of the numbers that made headlines on Friday.
The News Story
The U.S. economy added 162,000 jobs in August, the Bureau of Labor Statistics reported Friday, September 4, 2026, roughly 3 times what economists had forecast and the strongest monthly gain since March. The unemployment rate held at 4.1 percent, with 7.0 million people counted as unemployed. Wall Street forecasts had ranged from 53,000 to 58,000 new jobs.
The report also revised the 2 prior months upward. June was raised by 11,000 to a gain of 31,000, and July, first reported as a loss of 23,000 jobs, was revised to a gain of 21,000. Combined, employment in June and July now stands 55,000 higher than previously reported. The August figure is well above the average monthly gain of 31,000 over the prior 12 months.
Restaurants and bars led the hiring, adding 59,000 jobs against a 12-month average of 12,000. Local government education added 42,000, largely reversing a drop in July. Manufacturing added 16,000 and is up 58,000 since its recent low in December 2025. Health care added 13,000, slower than its 12-month average of 32,000. Construction rose 22,000. The information sector lost 23,000 jobs, with cuts in computing infrastructure and data processing (down 8,000), publishing (down 7,000), and broadcasting (down 5,000).
Average hourly earnings rose 10 cents, or 0.3 percent, to $37.75, and are up 3.1 percent over the past year. The labor force participation rate edged up to 61.6 percent but is down half a point since January. The number of people working part time for economic reasons fell by 414,000 to 4.4 million.
The payroll figure landed far above the ADP National Employment Report released Wednesday, which showed private employers adding 38,000 jobs in August.
Markets read the strength as raising the odds of an interest rate increase. Futures traders priced in a 60 percent chance the Federal Reserve raises the federal funds rate by a quarter point at its meeting on September 16, up from 49 percent a day earlier, according to CME Group’s FedWatch tool. Fed Chair Kevin Warsh said at Jackson Hole last week that labor markets are “quite stable” and that the 4.1 percent unemployment rate “remains low by historical standards.” Several strategists said next week’s Consumer Price Index report will decide the Fed’s move. The most recent CPI showed inflation at 3.4 percent over the past year.
The jobs data arrived the same morning diesel prices set a record. AAA put the national average at $5.85 a gallon on Friday, above the previous high of $5.81 set in June 2022. Diesel cost $3.76 a gallon on the eve of the Iran war, which began in late February. Brent crude traded above $95 a barrel Friday, up from about $70 before the war, and the national average for regular gasoline stood at $4.15, up from $4.09 a week earlier. NPR reported that limits on shipping through the Strait of Hormuz, Ukrainian strikes on Russian refineries, and refiners shifting output toward jet fuel have all tightened diesel supply. About 90 percent of the nation’s 500,000 school buses and 75 percent of farm equipment run on diesel.
Vice President JD Vance told reporters Thursday that U.S. naval protection of shipping is “why we have not had a worldwide energy crisis” and said “everything” remains on the table to force Iran to stop firing on commercial vessels. The next Employment Situation report, covering September, is scheduled for October 2, 2026.[1]
Catholic Social Teaching Analysis
Start with the phrase Wall Street used on Friday, because it gives the game away. Analysts called it a “good news is bad news” report. More people working is good. But more people working means the Federal Reserve is more likely to raise interest rates, which pushes stock prices down, so for the people whose job is to watch stock prices, a strong month of hiring registered as a loss. Within a day, the odds of a September rate hike went from 49 percent to 60 percent, and that number, rather than the 162,000, is what moved the market.
The traders are doing their jobs, and I’d rather learn from their reaction than mock it. It shows that “is the economy good?” has no answer until you say good for whom, and by what measure. The Church has an answer to that question, and it is more specific than most people expect.
The Test The Church Actually Uses
John Paul II, in Laborem Exercens, wrote that “the justice of a socioeconomic system and, in each case, its just functioning, deserve in the final analysis to be evaluated by the way in which man’s work is properly remunerated in the system.”[2] He then said it a second time in even plainer words: “a just wage is the concrete means of verifying the justice of the whole socioeconomic system and, in any case, of checking that it is functioning justly.”[3] The Compendium of the Social Doctrine of the Church takes that sentence and builds its whole treatment of wages on it, opening with the claim that “Remuneration is the most important means for achieving justice in work relationships.”[4]
Notice what this does. It hands you a single gauge. You don’t have to weigh a dozen indicators against one another. You look at what the work pays, and you ask whether that pay does the thing pay is for. The Compendium says what that thing is: “A salary is the instrument that permits the labourer to gain access to the goods of the earth.”[4] A wage is a key. It opens the door to food, rent, fuel, a doctor. So the question for any wage is whether it still opens the door.
Now apply that gauge to Friday’s report, and you arrive at the number behind the number. Average hourly earnings rose 3.1 percent over the past year. Consumer prices rose 3.4 percent over the same period. The typical worker’s key fits a little less well than it did a year ago. And that’s the average. Diesel has gone from $3.76 to $5.85 since February, a rise of more than 55 percent. Diesel moves nearly everything a working family buys, so the price of that one fuel sits inside the price of the groceries, the school bus, and the delivery truck. A 3.1 percent raise doesn’t cover that. For a worker whose commute is long or whose work runs on a diesel engine, it doesn’t come close.
Look, too, at where the 162,000 jobs landed. Restaurants and bars accounted for 59,000 of them, the largest single block by far, at 5 times that sector’s usual monthly pace. Those are real jobs and I’m glad for every one of them. They are also among the lowest-paid jobs in the economy, and a job that pays $15 an hour meets a $5.85 gallon of diesel with much less cushion than a job that pays $40. The headline count treats those hires as interchangeable with the 16,000 in manufacturing. The Church’s gauge does not.
Why “Frugal And Well-Behaved” Still Matters
Leo XIII set the floor in 1891. In Rerum Novarum he allowed that workers and employers should agree freely on wages, then added that “there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner.”[5] The Compendium restates the same limit: the agreement between employee and employer “is not sufficient for the agreed-upon salary to qualify as a ‘just wage’, because a just wage ‘must not be below the level of subsistence’ of the worker: natural justice precedes and is above the freedom of the contract.”[4]
That phrase, “frugal and well-behaved,” is doing precise work. Leo describes a worker who does everything right, spends carefully, and wastes nothing, and he sets the floor there rather than at comfort. If that worker’s wage still can’t carry his family to the end of the month, the wage is unjust, and the fact that he signed the offer letter changes nothing. Subsistence is a moving target, and this is the point where a record diesel price stops being a business story and becomes a moral one. A wage that covered subsistence in February may fail to cover it in September without a single employer cutting a single paycheck. The energy price did the cutting.
Pope Leo XIV made the same observation about poverty in wealthy countries in Dilexi Te. “In Europe,” he wrote, “more and more families find themselves unable to make it to the end of the month,” and he warned that poverty “must always be understood and gauged in the context of the actual opportunities available in each concrete historical period.”[6] He also cautioned against reading data that has been “interpreted” to make the situation of the poor look less serious than it is.[7] A 4.1 percent unemployment rate is true. It is also the kind of number that can be read to make the end of the month disappear.
Distribution Is Part Of The Measurement
There’s one more piece, and it’s the one that answers the traders directly. The Compendium states that “the economic well-being of a country is not measured exclusively by the quantity of goods it produces but also by taking into account the manner in which they are produced and the level of equity in the distribution of income.”[8] Read that against Friday. The stock market, which is the mechanism through which those who own capital are paid, fell on news that more workers were hired. The Federal Reserve is weighing whether to make borrowing more expensive because too many people found work. In both cases the interests of those who own and those who labor were pulling in opposite directions, and the tools we use to judge the economy are built to register only one side of that pull.
The Fed has good reason to fight inflation. Inflation is a tax on the poor, and the 3.4 percent figure hurts the restaurant worker more than anyone. The Church’s teaching leaves that judgment to the Fed and makes a narrower, harder claim of its own: you have not measured an economy until you have measured what the person at the bottom of it can buy with a day’s work. Everything else is a proxy.
So here’s what I’d ask you to carry out of this. The next time a jobs number comes across your screen, look for the number behind it. Find the wage line and set it beside the price line. Ask what a full-time week buys now that it didn’t buy in February, or buys now that it did. If you employ anyone, ask that question about your own payroll before the next fuel bill forces it on you. And if you’re on a parish council or a diocesan board deciding what to pay a custodian or a school aide, remember that the offer letter he signs does not settle whether the wage is just. Natural justice precedes the contract. Leo XIII said so in 1891, and the price of diesel has been proving it since February.
This story turns on the just wage as the concrete test of whether an economy is functioning justly.
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Footnotes
- “The Employment Situation, August 2026,” U.S. Bureau of Labor Statistics, September 4, 2026, bls.gov; Cris Tolomia, “US Employers Add 162,000 Jobs, Unemployment Holds at 4.1%,” Quartz, September 4, 2026, qz.com; Karee Venema, “What a Blowout August Jobs Report Means for a September Rate Hike,” Kiplinger, September 4, 2026, kiplinger.com; “The US Economy Added 162,000 Jobs in August, More than Double Expectations,” CNN Business, September 4, 2026, cnn.com; “Jobs Report August 2026,” CNBC, September 4, 2026, cnbc.com; Willa Rubin, “The Price of Diesel Hits a Record High,” NPR, September 4, 2026, npr.org; Greg Norman-Diamond and Brittany Miller, “Vance Says ‘Everything’ on the Table to Pressure Iran as US Diesel Prices Hit Record High,” Fox News, September 4, 2026, foxnews.com. ↩
- Pope John Paul II, Laborem Exercens: On Human Work (Vatican City: Libreria Editrice Vaticana, 1981), no. 19, vatican.va. ↩
- Pope John Paul II, Laborem Exercens, no. 19. ↩
- Pontifical Council for Justice and Peace, Compendium of the Social Doctrine of the Church (Vatican City: Libreria Editrice Vaticana, 2004), no. 302, vatican.va. ↩
- Pope Leo XIII, Rerum Novarum (Vatican City: Libreria Editrice Vaticana, 1891), no. 45, vatican.va. ↩
- Pope Leo XIV, Dilexi Te (Vatican City: Libreria Editrice Vaticana, 2025), nos. 12 and 13, vatican.va. ↩
- Pope Leo XIV, Dilexi Te, no. 13. ↩
- Pontifical Council for Justice and Peace, Compendium of the Social Doctrine of the Church, no. 303. ↩
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