Live Updates: U.S. Labor Markets Stalled This Summer, With August Data Adding to Slowdown
Employers added only 22,000 jobs in August, and the unemployment rate rose slightly to 4.3 percent. Revised data also showed that employment fell by 13,000 jobs in June, the first net loss since December 2020.
Analyst reactions are coming in and they are dour. “August’s Employment Report confirmed that the labor market has headed off a cliff-edge,” wrote Bradley Saunders, a North America economist for Capital Economics. “The labor market is losing lift, and August’s report, along with downward revisions, suggests we’re heading into turbulence without the soft landing achieved,” wrote Daniel Zhao, an economist with the employment review website Glassdoor.
The drop in government bond yields, which underpin borrowing rates for companies and consumers, has continued, pushing the 2-year Treasury yield, which is sensitive to changes in interest rate expectations, below 3.5 percent for the first time in three years.
The number of Americans who have been out of work for more than six months, the typical definition of long-term unemployment, has been steadily rising in recent months and hit 1.9 million in August.
The average workweek remained steady at 34.2 hours. One lever companies can pull to cut costs during challenging economic times is to have employees work fewer hours, but that does not appear to be the case yet. A year ago, the average workweek stood at a similar 34.3 hours.
A small bright spot appears to be the leisure and hospitality sector, which added 28,000 jobs last month. Restaurants, bars and other businesses providing food services added 11,000 jobs. But hotels and other accommodation businesses added just 2,000 jobs, an anemic amount
Revised data now shows that employers cut 13,000 jobs in June. It was the first net loss of jobs since December 2020, Trump’s last full-month in office during his first term and a moment when the pandemic had largely shut down the economy.
This report will resolve some of the divisions that Fed officials have had to wrestle with over the timing of restarting interest rate cuts. Before this report, there was a cohort of policymakers who did not see an urgent need to lower borrowing costs and instead stressed that the central bank needed to be more wary about the risks posed by resurgent inflation as a result of Trump’s tariffs. What this report may do, however, is prompt more discussion over the pace of forthcoming cuts.
Colby Smith
Sept. 5, 2025, 8:45 a.m. ET
Colby Smith
Christopher Waller, a governor who at the last meeting supported a quarter-point cut, said recently that he would be open to more aggressive cuts if August’s data “points to a substantially weakening economy and inflation remains well contained.” Still, with the unemployment relatively steady at 4.3 percent, that bar might not have been reached.
Tony Romm
Sept. 5, 2025, 8:44 a.m. ET
Tony Romm
Trump has not yet commented publicly since the jobs report was released. Asked yesterday about the data, and the extent to which it could be trusted, he appeared to downplay what would turn out to be a dour readout once the official numbers arrived Friday.
“The real numbers that I’m talking about are going to be whatever it is, but will be in a year from now, when these monsters, huge, beautiful places, the palaces of genius, and when they start opening up, you’re seeing, I think you’ll see job numbers that are going to be absolutely incredible,” Mr. Trump said, appearing to refer to tech companies. “Right now, it’s a lot of construction numbers, but you’re going to see job numbers like our country has never seen before.”
Sydney Ember
Sept. 5, 2025, 8:42 a.m. ET
Sydney Ember
Jobs in federal government continued to decline last month by 15,000 amid the Trump administration’s ongoing efforts to downsize the federal work force. Since its peak at the beginning of the year, the federal government has lost 97,000 jobs.
Sydney Ember
Sept. 5, 2025, 8:40 a.m. ET
Sydney Ember
Temporary help services, which tend to fall during tenuous economic times, lost 10,000 jobs.
Ben Casselman
Sept. 5, 2025, 8:40 a.m. ET
Ben Casselman
The unemployment rate rose, but the household survey was actually relatively strong. The labor force grew and more Americans reported that they were employed.
Ben Casselman
Sept. 5, 2025, 8:41 a.m. ET
Ben Casselman
As seasoned data-watchers know, the monthly jobs report is actually based on two separate surveys, one of employers and one of households. The two generally align over the long term, but can tell different stories in any given month. This month, the household survey painted a bit of a rosier picture than the employer survey.
Sydney Ember
Sept. 5, 2025, 8:40 a.m. ET
Sydney Ember
Trump has made bringing manufacturing back to the United States a key part of his economic agenda but so far, the sector continues to lose jobs.
Joe Rennison
Sept. 5, 2025, 8:40 a.m. ET
Joe Rennison
Investors already expected the Fed to cut interest rates by a quarter of a percentage point in September, but these numbers will nail down that expectation. Investors are also raising bets on sequential cuts in both September and October, rather than betting on a larger cut to rates at the Fed’s September meeting.
Lydia DePillis
Sept. 5, 2025, 8:35 a.m. ET
Lydia DePillis
Also significantly, the only sector adding significant jobs was health care, at 31,000 jobs. Almost every sector subtracted jobs, including manufacturing, which dropped 12,000 positions. This is a picture of a labor market with almost no energy left.
Sydney Ember
Sept. 5, 2025, 8:35 a.m. ET
Sydney Ember
The health care sector, which has propped up the labor market for months, adding 31,000 jobs in August. The private sector on the whole added 38,000 jobs on net.
Joe Rennison
Sept. 5, 2025, 8:34 a.m. ET
Joe Rennison
The weaker jobs data has raised expectations of rate cuts, with government bond yields, which are heavily influenced by interest rate expectations, falling sharply. The 2-year Treasury yield fell to its lowest level since 2022.
Colby Smith
Sept. 5, 2025, 8:34 a.m. ET
Colby Smith
This report solidifies the case for the Fed to restart interest rate cuts in September, as was widely expected ahead of this report. The data underscores what Jerome H. Powell, the chair, described late last month as a “curious balance” of the labor market in which demand for new hires has slowed but the supply of available workers has also shrunk as a result of Trump’s immigration restrictions.
Ben Casselman
Sept. 5, 2025, 8:33 a.m. ET
Ben Casselman
Employment growth for June and July was revised down, but only modestly, by a combined 21,000 jobs. But the revision was significant in one way: The government now says employment actually fell by 13,000 in June.
Ben Casselman
Sept. 5, 2025, 8:31 a.m. ET
Ben Casselman
The numbers are out! U.S. employers added 22,000 jobs in August and the unemployment rate ticked up to 4.3 percent