U.S. Jobs Report Shows Weak Growth as Unemployment Hits 4.3%

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•  05 Sep 2025
 

The U.S. Jobs Report showed weaker-than-expected results in August. According to the latest jobs report, the economy added just 22,000 new positions, far below the 75,000 economists had projected. At the same time, the unemployment rate rose to 4.3%, the highest since early 2021, reflecting a slowdown in hiring momentum.

This marks the second consecutive month that job gains have come in below expectations. July added only 73,000 jobs, and the biggest surprise came from backward revisions: June now shows a net loss of 13,000 jobs, instead of the previously reported 14,000 increase. This is the first month of net job losses since December 2020.

For the first time in over four years, the number of unemployed Americans (7.24 million) has surpassed the number of available job openings (7.18 million). Experts say this signals a shift from a “worker’s market” to an “employer’s market,” giving companies more leverage in hiring. Retailers like Walmart and Chipotle report increasingly cash-strapped customers, while some companies warn that price increases may be on the horizon.

Political developments are also adding uncertainty. Former President Trump recently fired Erica McAnterfer, the head of the Bureau of Labor Statistics, claiming the data was “manipulated to make him look bad.” She has been replaced by conservative economist Irwin John Anthony, pending Senate approval—a move that has sparked concerns about the potential politicization of economic data.

Fed Chair Jerome Powell has previously highlighted a “strange balance” in the labor market, where both the supply and demand for workers are slowing at the same time. Immigration restrictions limit available talent, while companies hold off on hiring and focus on efficiency. Trade policies, including tariffs, add another layer of uncertainty, causing some businesses to pause recruitment.

Despite these challenges, the U.S. economy continues to grow at an annual rate of 3%, and many macroeconomic indicators remain stable. However, the Michigan Consumer Sentiment Index fell 6% in August, and surveys suggest that workers are anticipating lower wages. Announced layoffs have also climbed to relatively high levels.

In response to the jobs report the likelihood of a Federal Reserve rate cut in September has surged to 97.8%, with traders now pricing in three cuts by the end of the year. The central question remains: will monetary policy be enough to boost hiring, or will further measures be needed to strengthen the labor market in the months ahead?

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