U.S. Adds Just 22,000 Jobs in August as Labor Market Shows Fresh Weakness

The U.S. economy added a scant 22,000 jobs in August, the Bureau of Labor Statistics said Friday, a result that underscored renewed weakness in the labor market and came with downward revisions that showed the economy actually lost jobs in June.

The unemployment rate rose to 4.3 percent in August from 4.2 percent the prior month, and the BLS’s revisions reduced the level of hiring earlier in the summer: the agency reported a loss of 13,000 jobs in June — the first monthly decline since 2020 — altering previously reported gains. Year-to-date nonfarm payroll growth now stands at about 619,000, roughly half the pace seen a year earlier.

The report adds to a string of softer economic indicators this week and intensified investor expectations that the Federal Reserve will move to cut interest rates at its upcoming policy meeting. “The warning bell that rang in the labour market a month ago just got louder,” said Olu Sonola, head of U.S. economic research for Fitch Ratings, in response to the data.

Alongside the monthly payrolls report, weekly claims for unemployment benefits rose modestly but remained within a historically healthy range. The Labor Department reported 237,000 initial claims for the week ending Aug. 30, up 8,000 from the prior week and above the 231,000 that economists had expected. Weekly claims are widely monitored as a proxy for layoffs and have largely stayed between 200,000 and 250,000 since the U.S. began emerging from the COVID-19 pandemic.

Labor-market indicators have shown a mix of resilience and cooling. Employers continued to advertise a large number of vacant positions — about 7.2 million job openings at the end of July — but hiring has slowed, producing what some economists describe as a “no hire, no fire” environment in which firms hold onto existing workers while curbing new hires.

Markets reacted to the weak payrolls and the downward revisions with renewed bets on rate relief from the Fed. Financial market pricing shifted to reflect a higher likelihood of a rate cut at the central bank’s next meeting.

The latest BLS report comes as the administration’s trade measures, including tariffs that took effect in early August, have prompted debate about their near-term effects on hiring and prices. The White House on Friday moved to replace the BLS director, Erika McEntarfer, after a series of significant downward revisions to prior months’ payroll figures. The president has publicly criticized the agency’s data; his nominee to lead the Bureau, E.J. Antoni — chief economist at the Heritage Foundation and a longtime critic of the jobs data — awaits Senate confirmation.

In a message posted on his social platform, the president blamed Federal Reserve Chair Jerome Powell for not yet lowering interest rates in response to the weakening labor-market signals.

Economists caution that one month’s payrolls figure should be weighed with other labor-market measures and that revisions are a normal part of the BLS reporting process. Still, Friday’s combination of tepid hiring, a small uptick in the unemployment rate, and the downward revisions for earlier months has sharpened concern among economists and investors about the pace of economic activity going into the fall.

The Labor Department’s monthly jobs report is a principal gauge of U.S. economic health and is closely watched by policymakers, investors and businesses. With hiring slowing and other indicators showing softness, officials and markets will be looking for signs in forthcoming data on wages, consumer spending and manufacturing to determine whether the weakness is transitory or signals a deeper slowdown.