US Job Growth Falls in August; Unemployment Reaches 4.3%
Washington DC, Friday, 5 September 2025.
August 2025 saw a sharp drop in U.S. job growth to 22,000, with unemployment rising to 4.3%. This trend may lead to a Federal Reserve interest rate cut.
Labor Market Weakness Evident in August
In August 2025, the U.S. labor market demonstrated significant weakness with only 22,000 nonfarm payroll jobs added, a stark decrease from the revised figure of 79,000 in July. This slowdown in job growth coincides with the unemployment rate climbing from 4.2% in July to 4.3% in August, marking the highest unemployment rate in nearly four years [1][2][3].
Implications for Federal Reserve Policy
The sluggish job growth and rising unemployment rate have reinforced expectations for a potential interest rate cut from the Federal Reserve at its upcoming meeting on September 16-17, 2025. Federal Reserve Chair Jerome Powell has hinted at possible rate reductions to counteract labor market risks, although inflation pressures remain a consideration [1][2][4].
Factors Contributing to the Job Market Slowdown
Economists attribute part of the labor market’s softness to policies from former President Donald Trump, including elevated tariffs and stringent immigration controls, which have added uncertainty and inflationary pressures to the market [1][5]. Moreover, the recent firing of Bureau of Labor Statistics Commissioner Erika McEntarfer by Trump has sparked controversy, with accusations of data manipulation unsubstantiated by evidence [1][2][6].
Revisions and Future Predictions
Looking ahead, the Bureau of Labor Statistics is expected to release a preliminary revision estimate on September 12, 2025, which may further downgrade employment levels by up to 800,000 jobs based on new data. This potential revision underscores the volatility and uncertainty currently characterizing the U.S. labor market [1][5].