Economists Anticipate Modest August Job Gains as Unemployment Slightly Rises
The Labor Department is expected to report an addition of about 65,000 jobs in August and a rise in the unemployment rate to 4.2%, reflecting a continued low-hire, low-fire labor market.
The U.S. Labor Department is slated to release its August employment report on Friday, with most forecasters projecting a net increase of roughly 65,000 jobs and a modest uptick in the unemployment rate to 4.2%. The figures would follow a July surprise loss of about 23,000 jobs and a dip in the jobless rate to 4.1% as workers left the labor force.
Analysts describe the current labor market as “low-hire, low-fire,” a condition shaped by demographic shifts, slower immigration, advances in artificial intelligence and broader economic uncertainties. Recent benchmarking data from the Bureau of Labor Statistics suggests that annual job growth from April 2025 to March 2026 may be lower than previously estimated, reducing the average monthly gain to around 16,000 jobs.
Hiring has been constrained by high inflation, elevated interest rates, policy volatility and geopolitical factors. > “These drivers that are underlying employers’ hesitance to hire – both inflation as well as uncertainty – they are going to take a long time to ease,” said Noah Yosif, chief economist at the American Staffing Association. He added that employers are waiting for lower business costs and greater certainty before expanding payrolls.
Yosif also noted a declining labor supply due to reduced immigration, lower birth rates and increased retirements, which he said helps keep the market in balance. Other economists view July’s job loss as likely stemming from seasonal adjustment quirks, particularly a temporary dip in local government education employment.
Sector-specific outlooks remain mixed. The ADP private-sector report showed gains of 45,000 jobs in education and health services, offset by losses elsewhere, while job cuts announced in August fell to the lowest level since 2022. Unemployment claims stayed low at 206,000 for the week.
Wage growth has slowed, with base pay rising 3.2% overall, 3% for workers staying in their jobs and 4.7% for those changing employers. > “There is a cost to a low-hire, low-fire labor market, because one of the ways that workers outrun too-high inflation is by switching jobs,” said Nela Richardson, chief economist at ADP.