United States job creation continued to struggle in August, signalling weakness in the labour market and potentially raising the chance of an interest rate cut.
Just 22,000 non-farm jobs were added last month, dropping from 79,000 in July. The unemployment rate increased from 4.2% to 4.3%, the highest since 2021.
“Over the month, a job gain in health care was partially offset by losses in federal government and in mining, quarrying, and oil and gas extraction,” according to the U.S. Bureau of Labor Statistics (BLS).
The healthcare sector reported a gain of 31,000 jobs, though this was below its 12-month average of 42,000. Mining, quarrying, and oil and gas extraction jobs dropped by 6,000.
Federal government employment also fell by 15,000 in August, having plummeted by 97,000 from January. Trade employment and manufacturing employment were each down by 12,000.
The number of unemployed people was 7.4 million, the BLS said. In August, there were 786,000 unemployed people seeking a first job, down 199,000 from July.
Jobs added in June and July were revised downward by a total of 21,000.
Non-farm jobs declined by 13,000 in June, compared with the BLS’ previously reported increase of 14,000. Around 79,000 jobs were added in July, revised upwards from 73,000.
U.S. President Donald Trump fired BLS Commissioner Erika McEntarfer after the slowdown in growth reported last month, alleging the BLS had “rigged” downward revisions. Trump has nominated Heritage Foundation economist E.J. Antoni to replace McEntarfer, though he has yet to be confirmed.
Total non-farm job openings also declined in July, according to the BLS’s Job Openings and Labor Turnover Summary. The number of openings was below the number of unemployed workers for the first time in more than four years.
“The U.S. labour market isn’t just slowing — it is now dangerously close to stalling. The addition of just 22,000 jobs in August, along with net downward revisions of previous months, shows an economy straining under the immense economic uncertainty and significant policy changes of 2025,” wrote Indeed Hiring Lab economist Laura Ullrich.
“This data will certainly play a pivotal role in the FOMC [Federal Open Market Committee] discussion later this month, with the probability of a rate cut increasing significantly.”
The Federal Reserve will next meet to consider a rate cut on 16-17 September. Fed Chair Jerome Powell indicated in late August that a cut may be increasingly likely despite elevated inflation, due to potential “downside risks to employment”.
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