The US jobs market stalled over the summer, adding just 22,000 jobs in August and continuing a slowdown in the labor market as businesses adjusted to disruptions caused by tariffs.
The latest jobs report also contained more bad news. The US lost 13,000 jobs in June, according to the latest survey.
The unemployment rate for August inched up to 4.3%, the highest it’s been since 2021.
The closely watched data comes from a monthly survey of employers conducted by the Bureau of Labor Statistics (BLS), which has been under attack from Donald Trump after it revised its findings last month, showing that hiring in early summer was much weaker than initially reported.
Last month the BLS slashed the number of new jobs created in May and June by by more than 250,000. The figures – revised when the bureau received more reports from businesses and government agencies – showed hiring over the summer was far weaker than first reported. The revised figures for May and June were 19,000 and 14,000, respectively – the lowest since the pandemic.
Those figurees were revised again this month. The BLS revised June’s tally down by 27,000, from +14,000 to -13,000, and the change for July was revised up by 6,000, from +73,000 to +79,000. Employment in June and July combined was 21,000 lower than previously reported.
Though Trump claimed the revisions were “rigged in order to make the Republicans, and me, look bad”, August’s figures show that the slumped pattern has continued even after Trump fired the bureau’s commissioner in retaliation. Trump has nominated a conservative ally who helped write Project 2025 as the bureau’s commissioner, leaving many economists worried about the future of the bureau.
And data from other sources besides the bureau has also highlighted stagnation in the labor market. Payroll firm ADP reported Thursday that private employers added 54,000 jobs in August, nearly 20,000 below expectations. Outplacement firm Challenger, Gray & Christmas also reported that job cuts reached 85,979 in August – up 39% from July and up 13% compared with August 2024.
“The year started with strong job growth, but that momentum has been whipsawed by uncertainty. A variety of things could explain the hiring slowdown, including labor shortages, skittish consumers and AI disruption,” said Nela Richardson, chief economist at ADP.
The Federal Reserve has been monitoring the labor market for signs that it may need to adjust interest rates. At his speech at the Fed’s Jackson Hole, Wyoming, symposium last month, Fed chair Jerome Powell seemed to hint that officials were leaning toward a rate cut at their next meeting on 17 September.
Though Wall Street investors have been waiting for the Fed’s next rate cut, which would be its first since December, the next cut will likely come with caveats. Powell emphasized that it’s still unclear what impact Trump’s tariffs and immigration policies will have on the economy.
“There is significant uncertainty about where all of these policies will eventually settle and what their lasting effects on the economy will be,” he said.
Powell warned that while there are new jobs being added each month, “the downside risks to employment are rising. And if those materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.”