August Jobs Report Shows Sharp Slowdown in U.S. Employment Growth

The U.S. labor market experienced a significant slowdown in August, adding just 22,000 nonfarm payroll jobs, a sharp decline from July's revised increase of 79,000. The unemployment rate rose to 4.3%, the highest level since 2021.

Revisions to previous months' data revealed a net loss of 13,000 jobs in June, marking the first decline since the 2020 pandemic. The three-month average for job gains now stands at 29,000 per month, the lowest since the COVID-19 pandemic.

The CME FedWatch Tool indicates a 14.3% probability of a 50-basis-point rate cut at the Federal Open Market Committee's September 16-17 meeting, up from 0% a day earlier. The likelihood of a 25-basis-point cut is now 85.7%, down from 96.4% the previous day.

Economists attribute the labor market's weakness to factors including President Trump's tariffs and immigration policies, which have constrained hiring and reduced the labor pool. Job losses were observed in sectors such as manufacturing, wholesale trade, and business services, while healthcare added 31,000 positions.

In response to the disappointing job data, President Trump dismissed Bureau of Labor Statistics Commissioner Erika McEntarfer, appointing E.J. Antoni as her replacement.