US Job Growth Slows in August as Unemployment Rises

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The U.S. labor market weakened in August, adding to concerns about the strength of the economy. Employers created 22,000 jobs last month, fewer than economists had expected, while the unemployment rate inched up to 4.3% from 4.2%, the Labor Department reported on Friday.

The data follow a series of downward revisions earlier this summer, including confirmation that the economy lost jobs in June, the first monthly decline since 2020. Analysts said the latest figures suggest a broader cooling trend rather than a temporary slowdown.

Sectors hit hardest included government, which cut 15,000 positions, as well as manufacturing and construction. Those losses offset gains in healthcare employment. “Four straight months of manufacturing job losses stand out,” said Olu Sonola, head of U.S. economic research at Fitch Ratings.

President Donald Trump dismissed the head of the Bureau of Labor Statistics after the release, accusing her of bias. Economists, however, said tariffs, tighter immigration policies and reduced federal spending have created uncertainty for businesses and contributed to weaker hiring.

Picture Credit: cepr.net

Financial markets reacted calmly to the news. U.S. Treasury yields fell sharply and stocks opened slightly higher as investors increased bets that the Federal Reserve will lower interest rates at its meeting this month. Average hourly pay rose 3.7% year-on-year, the report showed.

Other indicators also point to a softer labor market. Job openings dropped to their lowest level since 2024 earlier this week, while jobless claims have edged higher. Despite the recent rise, unemployment remains near historic lows.

White House officials attributed the slowdown to the Fed, saying it had been too slow to cut rates. Economists said the economy now requires fewer new jobs each month because immigration has slowed, but August’s total still fell short of that level.