The US labour market stalled over the summer, with only 22,000 jobs added in August, according to the latest monthly survey from the Bureau of Labor Statistics. The figures continue a slowdown as businesses adjust to disruptions caused by tariffs. The report also showed that the US lost 13,000 jobs in June, the first negative reading since December 2020.
The unemployment rate edged up to 4.3% in August, the highest level since 2021. Healthcare added 31,000 positions, but most other sectors were flat or recorded losses. Federal employment fell by 15,000 jobs in August, bringing total losses since January to 97,000, while manufacturing shed 12,000 jobs last month and 78,000 for the year as a whole. The racial employment gap widened, with the unemployment rate for Black Americans rising to 7.5% from 6.1% a year earlier, compared with 3.7% for White Americans.
The Bureau of Labor Statistics has faced criticism from President Donald Trump after it revised earlier figures downwards. Last month the bureau cut the number of new jobs created in May and June by more than 250,000, with revised figures of 19,000 and 14,000 respectively. This month June was revised down by 27,000 to a loss of 13,000, while July was revised up by 6,000 to 79,000. Employment in June and July combined was 21,000 lower than previously reported. Mr Trump claimed the revisions were "rigged in order to make the Republicans, and me, look bad", and has since fired the bureau's commissioner. He has nominated a conservative ally who helped write Project 2025 as the new commissioner, prompting concerns among economists.
Other data sources also point to stagnation. Payroll firm ADP reported that private employers added 54,000 jobs in August, nearly 20,000 below expectations. Outplacement firm Challenger, Gray & Christmas said job cuts reached 85,979 in August, up 39% from July and 13% year-on-year. "The year started with strong job growth, but that momentum has been whipsawed by uncertainty," said Nela Richardson, chief economist at ADP.
The Federal Reserve is monitoring the labour market closely. At the Jackson Hole symposium last month, chair Jerome Powell hinted that officials were leaning toward a rate cut at their next meeting on 17 September. However, he emphasised uncertainty over the impact of Mr Trump's tariffs and immigration policies. "There is significant uncertainty about where all of these policies will eventually settle and what their lasting effects on the economy will be," he said. Powell also warned that while new jobs are being added each month, "the downside risks to employment are rising".
The White House has continued to pressure the Fed. Powell, whose second term ends in May 2026, was threatened with dismissal by Mr Trump before the president walked back those comments. The administration has also fired Fed governor Lisa Cook for alleged mortgage fraud, adding to concerns about political interference in the central bank.
