Job gains beat expectations in August while wage growth surged past estimates during a strong month for U.S. workers.

In August, the U.S. economy added 201,000 jobs and the unemployment rate held steady at 3.9%. Nonfarm payrolls were expected to rise by 190,000 in August with the unemployment rate forecast to drop to 3.8%.

The real standout in the report, however, were the gains in average hourly earnings, which rose 0.4% over last month and 2.9% over last year. Wages have been closely tracked for signs of building inflation pressures in the economy. This is the best annual private wage growth figure since May 2009.

Average hourly earnings were expected rise 0.2% over the prior month and 2.7% over the prior year.

Following Friday’s report stock futures were lower and Treasury yields higher as investors see this report as indicating a more inflationary economic environment, one that is unlikely to see the Fed change its plans to raise rates two more times this year.

Inside Friday’s report, manufacturing payrolls were a bit of a disappointment, dropping by 3,000 after having been solid in both June and July. Construction payrolls grew by 23,000 in August, however, continuing what’s been a fairly strong summer of hiring in the sector.

The financial services and education and health services sectors lead the way in August with 53,000 jobs gained in each sector during the month.

The black unemployment rate, which President Donald Trump has touted in recent months, declined to 6.3% in August though remains above the more than 40-year low of 5.9% hit back in May.

And while August’s report was an overall strong reading for the U.S. economy, the labor force participation was a disappointment, dropping to 62.7%. So while the population grew by 223,000 in August, the labor force lost 469,000 people.

July’s job gains were revised slightly lower on Friday, showing the economy added 147,000 jobs during the month. The initial July jobs report showed the economy added 157,000 jobs, missing consensus expectations. Over the last three months job gains have now averaged 185,000.

Friday’s report is the last employment report before the Federal Reserve’s next meeting — set for September 26 — at which the central bank is expected to raise interest rates for the third time this year.

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Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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