Quick Facts:
- Total nonfarm payroll employment changed little in August (+22,000) and has shown little change since April. The unemployment rate, at 4.3% , also changed little in August.
- Job gain in health care was partially offset by losses in federal government and in mining, quarrying, and oil and gas extraction.
- The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 1.9 million in August but has increased by 385,000 over the year.
- The number of people employed part time for economic reasons, at 4.7 million, changed little in August.
Looking Forward:
- U.S. job growth weakened sharply in August while the
unemployment rate increased to nearly a four-year high of
4.3%, confirming that labor market conditions were softening
and sealing the case for an interest rate cut from the
Federal Reserve this month. “
- Trump’s duties, which have boosted the nation’s average tariff rate to the
highest level since 1934, stoked fears of higher inflation, prompting the U.S. central bank to
pause its interest rate cutting cycle. Just as some of the uncertainty over trade policy was
starting to lift with most tariffs now in place, a U.S. appeals court ruled last Friday that
many of the duties were illegal, keeping businesses in a state of flux.
- The bulk of the jobs added in August were in healthcare, with payrolls in the sector rising 31,000. But even this pillar of the labor market is showing strain as the increase was below the average monthly gain of 42,000 over the last 12 months.
- Seema Shah, chief global strategist at Principal Asset Management, said that the August jobs report “just about strikes a balance between reinforcing market expectations for a sequence of Fed rate cuts and not yet inviting renewed concerns around recession, so the broad market response should be mildly positive.” “But concerns about the health of the economy are starting to creep in and a further deterioration in the labor market would soon tip the balance to ‘bad news is simply bad news.’ Equally, a strong inflation print next week could strike new fears about a “stagflationary” mix,” Shah added.
Source: U.S. Bureau of Labor Statistics – The Employment Situation – August 2025
