US Job Growth Slows Sharply in August, Fueling Recession Concerns

The U.S. economy added just 22,000 jobs in August, according to a report released Friday by the Bureau of Labor Statistics (BLS). The figure fell far short of the 75,000 jobs expected and marked a sharp slowdown from July’s revised total of 79,000 jobs.

The weak performance comes amid growing uncertainty over President Donald Trump’s economic policies, including trade wars and fiscal decisions that have made business leaders cautious about hiring.

Rising Unemployment and Sector Losses

The unemployment rate climbed to 4.3%, highlighting labor market strain. Factories shed 12,000 jobs, marking the fourth consecutive month of manufacturing job losses. Construction firms cut 7,000 jobs, while the federal government reduced its workforce by 15,000.

Additional revisions to June and July numbers erased another 21,000 jobs, leaving a net loss of 13,000 positions for June.

Wage Growth Holds Steady

Despite weak hiring, wages rose 0.3% month-over-month and 3.7% year-over-year, in line with economist forecasts.

Cracks in the Labor Market

Economists warn the labor market is losing momentum in 2025. Job creation has averaged just 85,000 per month, compared with 168,000 per month in 2024 and a robust 400,000 per month during the 2021–2023 post-COVID recovery boom.

Heather Long, chief economist at the Federal Maritime Credit Union, cautioned:“The labor market shows signs of cracking. It hasn’t collapsed yet, but the warning signals are there as businesses begin scaling back hiring.”

Interest Rate Outlook

The disappointing jobs report is likely to intensify calls for Federal Reserve rate cuts. Analysts expect the Fed to move ahead with a widely anticipated rate reduction during its September 16–17 meeting.

A cut in the federal funds rate could lower borrowing costs across the economy—from mortgages and auto loans to business credit—potentially providing relief amid slowing economic growth.