US Job Growth Slows Unemployment Rises
U.S. Job Growth Stalls, Raising Concerns About Economic Slowdown
Washington, D.C. — The U.S. economy showed signs of slowing last month as the Labor Department reported job losses in June for the first time in over four years, fueling concerns that growth could be faltering.
According to Friday’s closely watched employment report, nonfarm payrolls increased by just 22,000 in August, following a revised gain of 79,000 in July. Economists had expected a rise of 75,000 jobs. Revisions also revealed that June actually saw a decline of 13,000 jobs, rather than the previously reported increase of 14,000.
“This economy is skating as close to the edge of a recession as you can get,” said Christopher Rupkey, chief economist at FWDBONDS. “Companies are clearly hunkering down, and the slowdown can be traced back to Washington’s economic policies. The only medicine that might help is a Fed rate cut.”
Economists point to a mix of factors for the slowdown, including President Donald Trump’s trade tariffs, stricter immigration policies, and significant public-sector layoffs. Trump, who did not comment directly on Friday’s report, criticized Federal Reserve Chair Jerome Powell on social media for not cutting interest rates sooner.
Job growth has been uneven in recent months. While healthcare added 31,000 jobs in August, below its 12-month average of 42,000, the social assistance sector saw gains of 16,000. Federal government employment fell by 15,000, bringing total cuts this year to 97,000 amid White House spending reductions. Manufacturing has lost jobs for four consecutive months, highlighting the effect of tariffs. Other sectors such as wholesale trade, construction, financial activities, and professional services also reported declines.
Wages, however, remain a bright spot. Average hourly earnings rose 0.3% in August, matching July’s increase, and up 3.7% year-on-year, slightly lower than July’s 3.9%. Still, a reduction in hours worked has sparked concerns about broader economic growth.
“The labor market has hit stall speed,” said Nicole Cervi, an economist at Wells Fargo. “With fewer hours worked and job growth slowing, the outlook for the economy is less certain.”
The unemployment rate ticked up to 4.3%, the highest since October 2021, while the number of long-term unemployed rose to 24.5 weeks on average. Economists also noted that recent policy changes affecting immigrant workers may have contributed to the rise in the labor force.
Financial markets reacted cautiously, with Wall Street stocks falling, the dollar weakening against other currencies, and U.S. Treasury yields declining. Analysts expect the Federal Reserve to implement a quarter-point rate cut at its September 16-17 meeting, with additional reductions possible later this year.
As the labor market shows signs of strain, economists and policymakers are watching closely for further signals on whether the U.S. economy can sustain growth or is headed toward a slowdown.
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