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Newsflash: The US economy added much fewer jobs than expected last month, in a sign that the labor market may be cooling sharply.<\/strong><\/p>\n August\u2019s non-farm payroll rose by just 22,000 jobs, the Bureau<\/strong> of<\/strong> Labor<\/strong> Statistics<\/strong> has reported, much weaker than the 75,000 expected.<\/p>\n That\u2019s a very weak jobs report, and the latest signal that the US economy is losing momentum.<\/p>\n The US unemployment rate has risen to 4.3%.<\/p>\n The BLS<\/strong> says:<\/p>\n A job gain in health care was partially offset by losses in federal government and in mining, quarrying, and oil and gas extraction.<\/p>\n Share<\/span><\/span><\/p>\n Key events<\/p>\n <\/span>Show key events only<\/p>\n Please turn on JavaScript to use this feature<\/span><\/p>\n <\/span><\/p>\n This chart from ING<\/strong> shows how the US jobs market has slowed in 2025:<\/p>\n <\/span>A chart showing the US non-farm payroll<\/span> Illustration: ING<\/p>\n They say:<\/p>\n Another soft jobs report is intensifying calls for meaningful Federal Reserve interest rate cuts. Consumers are already worried about squeezed spending power from tariffs and are now increasingly concerned about job security. Fed doves will intensify their calls for action<\/p>\n Share<\/p>\n The weakness in the US jobs market could encourage some policymakers at the Fed to consider a jumbo interest rate cut, rather than just quarter-point reduction to rates.<\/p>\n Janet Mui, <\/strong>head of market analysis at wealth manager RBC Brewin Dolphin, <\/strong>explains:<\/p>\n \u201cThe addition of just 22,000 jobs in August underscores a clear cooling trend in the U.S. labour market.<\/p>\n Manufacturing payrolls, which are particularly sensitive to tariffs, saw further declines and have now dropped by 42,000 since April this year.<\/p>\n This weak print is politically awkward for the administration, which has focused heavily on job creation via tariff-led industrial policy. With clear signs of slack emerging, today\u2019s U.S. jobs report gives a potential green light for the Federal Reserve to cut rates in September. There is even chatter that a jumbo 50bps rate cut is on the table, depending on next week\u2019s inflation data.<\/p>\n Investors are increasingly positioning for a shift toward looser monetary policy, with Fed funds rate expectations dipping below to 2.8% by the end of 2026.\u201d<\/p>\n Share<\/p>\n <\/span>The New York Stock Exchange<\/span> Photograph: Julia Demaree Nikhinson\/AP<\/p>\n Wall Street traders have driven stocks up to a record high at the start of trading in New York.<\/strong><\/p>\n The S&P 500<\/strong> share index, and the tech-focused Nasdaq<\/strong> share index have both touched intraday record highs as soon as the opening trading bell was rung.<\/p>\n That\u2019s a surprising reaction to the weak August jobs report, until you remember that investors are now more convinved that the Federal Reserve will cut interest rates.<\/p>\n Neil Birrell<\/strong>, chief investment officer at Premier<\/strong> Miton<\/strong> Investors<\/strong>, explains:<\/p>\n \u201cThe US jobs market is probably the most watched economic data at the moment, having been noted by the Fed as a key indicator.<\/p>\n The August data shows a notably lower gain in payrolls than expected and the unemployment rate moved up to 4.3% with the average weekly hours worked falling.<\/p>\n There isn\u2019t a huge amount to read into the numbers that is surprising, but it does suggest a weakening jobs market, which will probably nail down a Fed rate cut this month.\u201d<\/p>\n Share<\/p>\n Updated at\u00a009.37 EDT<\/p>\n Here\u2019s another example of how the US jobs market has weakened:<\/p>\n The labor market is going from frozen to cracking.<\/p>\n Look at how many industries have LOST jobs in the past 3 months.<\/p>\n Mining -13,000 The US job\u2026 pic.twitter.com\/BsUYoCTMX3<\/a><\/p>\n \u2014 Heather Long (@byHeatherLong) September 5, 2025<\/a><\/p>\n Share<\/p>\n August\u2019s employment report confirmed that \u201cthe labour market has headed off a cliff-edge,\u201d says Bradley<\/strong> Saunders<\/strong>, North America economist at consultancy Capital<\/strong> Economics<\/strong>.<\/p>\n Saunders <\/strong>told clients:<\/p>\n Non-farm payrolls rose by just 22,000 last month, while June\u2019s 19,000 increase was revised to show a 27,000 fall \u2013 the first out-and-out decline in monthly employment since late 2020.<\/p>\n Along with a slight upward nudge to July\u2019s figure, this leaves the three-month average employment gain at 29,000. The private sector added just 38,000 jobs last month, and even this modest figure owed a lot to a 47,000 rise in health care & social assistance employment.<\/p>\n Elsewhere, employment fell by 12,000 in both manufacturing and wholesale trade, as tariffs continued to bite. This takes the total toll on manufacturing employment since the start of the year to 78,000, confounding hopes of a tariff-led reshoring renaissance.<\/p>\n Share<\/p>\n Updated at\u00a009.15 EDT<\/p>\n One of the many pieces of bad news in today\u2019s US jobs report is that manufacturing employment is down by 78,000 over the year.<\/strong><\/p>\n That shows that Donald Trump\u2019s promises of a factory resurgence have not yet been delivered.<\/p>\n I’m not a big believer in diving into the industry breakdowns because I believe that all jobs matter.<\/p>\n But the Administration has made dramatic policy shift to boost manufacturing, and it just ain’t working. Manufacturing employment fell -12k, and is down -78k over the year.<\/p>\n \u2014 Justin Wolfers (@JustinWolfers) September 5, 2025<\/a>Share<\/p>\n Updated at\u00a009.12 EDT<\/p>\n The weak US jobs report is sending investors racing to buy government bonds, driving up prices and lowering yields.<\/strong><\/p>\n The yield, or interest rate, on US<\/strong> 30-year bonds has dropped by 6 basis points (0.06 percentage points), with shorter-dated Treasuries also rallying following the news that just 22,000 new jobs were created across the US last month.<\/p>\n UK government debt<\/strong> is benefitting too, just days after a painful sell-off.<\/p>\n Today, UK<\/strong> 30-year gilt yields have dropped by 5bps to 5.528%, the lowest since 18 August 18.<\/p>\n Benchmark 10-year UK<\/strong> bonds have also hit their strongest level since 18 August; they\u2019re down 6bps at 4.668%.<\/p>\n That\u2019s good news for chancellor Rachel<\/strong> Reeves<\/strong> \u2013 lower borrowing costs will mean the \u2018black hole\u2019 in her budget calculations will be smaller.<\/p>\n The downside, though, is that a weakening US<\/strong> economy is bad news for every other country too\u2026.<\/p>\n Share<\/p>\n \u201cThere\u2019s barely been any job growth in the past 4 months,\u201d points out Heather<\/strong> Long<\/strong>, chief economist at credit union Navy<\/strong> Federal.<\/strong><\/p>\n Responding to today\u2019s weak US jobs report, Long<\/strong> posts:<\/p>\n Almost all the jobs added are in healthcare. Without healthcare, job growth would be NEGATIVE in the past few months.<\/p>\n The Federal Reserve has to cut in September. And maybe October now.<\/p>\n The US economy lost -13,000 jobs in June –>The first negative month since December 2020 (!)<\/p>\n There’s barely been any job growth in the past 4 months. <\/p>\n Almost all the jobs added are in healthcare. Without\u2026 pic.twitter.com\/p2hrN8wsh0<\/a><\/p>\nUS stock market hits record high after weak jobs report<\/h2>\n
Construction -10,000
Manufacturing -31,000
Information -15,000
Business\/Professional -51,000
Federal gov’t -34,000
Finance 0 job gains<\/p>\nCapital Economics: US labor market has headed off a cliff-edge<\/h2>\n
US manufacturing employment down by 78,000 in last year<\/h2>\n
Bond yields fall after US jobs report misses forecasts<\/h2>\n