Job creation surged in August, weakening the labor market recently, and it is likely that the Federal Reserve will remain on track for the widely anticipated interest rate cuts later this month.
Non-farm salaries rose just 22,000 that month, but the unemployment rate rose to 4.3%, according to a report from the Bureau of Labor Statistics on Friday. The economists surveyed by Dow Jones were looking for 75,000 salaries.
The report showed a marked slowdown from a 79,000 increase of 79,000, up 6,000. The revision also showed a net loss of 13,000 in June after a prior estimate reduced to 27,000.
“The job market doesn’t require a runway hassle,” said Daniel Zhao, chief economist at Jobs Site Glassdoor. “The labor market has lost its lift, and the August report, along with a downward revision, suggests that soft landing is not achieved and is heading towards turbulence.”
The market largely ignored the report, stocks were opened, and the Ministry of Finance fell sharply. According to CME Group’s FedWatch gauge, traders at Futures Markets have increased the chance of a Fed Fed Read rate reduced to 100% to 100%, and have even priced it with a half-point move chance.
This was the first payroll count since President Donald Trump fired former BLS commissioner Erica Mantelfer following the release of his employment report in July a month ago. The move comes after the report showed not only the level of job creation but also dramatic reductions in total over the past few months.
At the McEntarfer location, the president appointed economist Ej Antoni. EjAntoni is Trump’s loyalty from the Heritage Foundation, who previously criticised BLS numbers as politically distorting. William Wiatrowski is acting as BLS Commissioner.
Although the employment pace was slow, monthly average hourly revenues rose 0.3%, meeting estimates, while annual profits of 3.7% were slightly below the 3.8% forecast.
Employment was curtailed by federal pay cuts, with a 15,000 drop reported.
Healthcare has once again led the sector, adding 31,000 jobs, while social assistance has donated 16,000 people. Both wholesale and manufacturing experienced a decline of 12,000 this month.
The report is widely expected that the Fed will cut benchmark interest rates by a quarter percentage point when the market releases its next decision on September 17th.
While most economic indicators show continuous expansion, Fed officials have expressed concern about a slower employment despite fairly stable layoffs. At the same time, policymakers are worried that Trump’s tariffs could rekindle inflation, with data showing prices have been slow but steadily rising in recent months.
“The warning bell that rang in the labor market a month ago was loud. The weaker than expected jobs have reported everything except 25 point-rate cuts later this month.” “The fourth consecutive month of employment losses stands out. It’s hard to argue that tariff uncertainty is not a key factor in this weakness.”
A survey of facilities showed weak job creation, but the number of more unstable households used to calculate unemployment rates held better news.
The report showed an increase of 288,000 employed, despite an increase of 148,000 unemployed classes. Workforce participation rose to 62.3%, but the workforce expanded at 436,000, accounting for a high tick of unemployment.
The broader measure of unemployment, including discouraged workers and those working part-time for financial reasons, has risen to the highest level since October 2021, up 8.1%, 0.2 percentage points.
In addition to Jobs Numbers Tally, Tuesday’s BLS will release an initial estimate for an annual benchmark revision, numbers dating back a year ago from March 2025.
In particular, the establishment of headlines asking businesses and government agencies to detail the pace of employment has become a source of controversy, especially in the post-Covid era.
BLS usually releases initial estimates in the first batch of survey responses obtained and updates twice to get more information. But Trump accused the BLS of politically biased. McEntarfer’s firing has attracted widespread criticism in economics and the market community.
In an interview with CNBC, National Economic Council director Kevin Hassett said that salary numbers are expected to rise in August. Over the past three years, the first August count has actually been revised lower than initial estimates.
Revised: Tuesday’s BLS will release an initial estimate for an annual benchmark revision, numbers dating back one year ago from March 2025. Previous versions stated the timing incorrectly.
