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- The US added 22,000 jobs in August, far fewer than the expected 75,000.
- Unemployment rose to the highest rate since 2021.
- Economists and markets expect the Fed to make its first interest rate cut of the year this month.
The US added 22,000 jobs in August, badly missing the expected 75,000, and unemployment increased to the highest rate since 2021.
Unemployment rose from 4.2% to 4.3%, as expected. The rate had been relatively low but at least 4% since May 2024.
Before the release, parts of the BLS’ website were reportedly offline. That glitch comes as more scrutiny is on the Bureau’s data after President Donald Trump fired former Commissioner Erika McEntarfer after a disappointing July report.
Job seekers have recently told Business Insider that they’ve tried networking, working on certifications, and using AI to help find jobs in a cooler job market.
“Overall, while the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers,” Federal Reserve Chair Jerome Powell said on August 22. “This unusual situation suggests that downside risks to employment are rising. And if those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.”
Tariff uncertainty continues to affect business decisions. Last week, the US Court of Appeals for the Federal Circuit ruled that most of President Donald Trump’s tariffs are illegal but will remain in effect through October 14 as the case continues to work through the courts. Trump recently appealed to the Supreme Court.
Mark Hamrick, Bankrate’s senior economic analyst, told Business Insider that the removal of these tariffs would “clear the rate-cutting path for the Federal Reserve because it is the primary reason why the outlook includes a high risk of rising prices” and bring some relief to the roughly two-thirds of Americans in a survey who thought tariffs would hurt their personal finances.
The Federal Reserve will make its next interest rate decision in mid-September. CME FedWatch, which shows the chances of the Fed changing rates, indicated before the new jobs report that there’s a nearly 100% chance of a rate cut.
Hamrick said the expected 25 basis point rate cut, after five consecutive decisions of holding rates steady, “would not have hugely consequential implications for the lives of most Americans” because the benchmark would still be restrictive.
“However, if it is the beginning of a sustained rate reduction campaign, that would be more meaningful, reducing economic headwinds and potentially giving the housing market a boost,” he added.
This is a developing story. Please check back for updates.
