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U.S. Job Growth Slows to Crawl, Unemployment Rises
5 Sep
Summary
- U.S. economy added just 22,000 jobs in August
- Unemployment rate climbed to 4.3%, highest since 2021
- Fed expected to cut rates at September meeting to support jobs
According to the latest jobs report, the U.S. economy added just 22,000 jobs in August, marking the fourth consecutive month of cooling labor growth. This figure came in well below Wall Street's expectation of around 75,000 new jobs.
At the same time, the unemployment rate edged up to 4.3%, its highest level since late 2021. The soft data has reinforced concerns that the labor market is losing momentum under the strain of trade tariffs, corporate cost-cutting, and rising automation.
The weak August jobs report has added urgency ahead of the Federal Reserve's September 16-17 policy meeting, where a rate cut is now widely expected. Fed Chair Jerome Powell has already acknowledged the risks of a slowing labor market, and policymakers must now weigh the benefits of lower borrowing costs against the risk of reigniting inflation.
A rate cut would bring relief to households and businesses, likely pushing down mortgage rates, auto loans, and corporate financing costs. However, with consumer prices still elevated, the Fed faces one of its toughest balancing acts since the pandemic recovery.
