US economy adds 22,000 jobs, unemployment rate hits 4.3% in August as labor market continues dramatic slowdown

The US labor market continued its dramatic summer slowdown in August.

The August jobs report released Friday by the Bureau of Labor Statistics (BLS) showed that just 22,000 new jobs were added to the economy last month, far fewer than forecast and the latest sign that the US labor market has cooled in recent months. The unemployment rate rose to 4.3% last month.

Economists had expected the report to show 75,000 jobs were created in August, with the unemployment rate forecast to rise to 4.3%, according to data from Bloomberg.

In July, the economy created 73,000 new jobs, but those figures were revised on Friday to show 79,000 jobs were created during the month. Revisions to June’s data, however, were more negative, with those numbers now showing 13,000 jobs were lost during the month, the first outright monthly decline since 2020. Revisions in early August had brought June’s job growth down to 14,000.

These revised figures now suggest that over the past three months, the US economy has created fewer than 30,000 new jobs, on average. After the July jobs report showed 258,000 fewer jobs were created in May and June than previously estimated, President Trump fired the head of the BLS.

Average hourly earnings rose 0.3% over past month and 3.7% over the prior year in August. Wall Street expected hourly earnings to have increased 0.3% over the prior month and 3.7% over last year.

“August’s Employment Report confirmed that the labor market has headed off a cliff-edge,” Capital Economics North America economist Bradley Saunders wrote in a report on Friday.

Friday’s report follows data out Thursday from private payroll provider ADP showing 54,000 private sector jobs were created last month. Data from the Labor Department showed initial filings for unemployment insurance tallied 237,000 last week, the most since June.

By industry, Friday’s report showed that education and health services were the largest job creators, adding 46,000 employees during the month. Losses were sharpest in the durable goods and business services industries, where 19,000 and 17,000 jobs, respectively, were lost in August.

The government sector lost 16,000 jobs in August.

Following this report, stock futures were mixed, with tech trading higher, and bond yields were falling as traders priced in a 100% chance that the Federal Reserve will cut rates at the conclusion of its September meeting.

Data from the CME Group showed traders putting an 88% chance on the Fed cutting rates by 0.25% later this month. Bets on the Fed cutting rates by 0.5% were given a 12% chance of coming through, according to the CME’s pricing.