Job Growth Slows Sharply in August, Raising Fears of Economic Stagnation

The U.S. economy added just 22,000 jobs in August, marking one of the weakest monthly performances in years and fueling concerns that the labour market is losing steam.

According to figures released Friday by the U.S. Bureau of Labour Statistics (BLS), the unemployment rate rose to 4.3%, its highest level since 2021. The report also showed that job gains in previous months were weaker than initially reported, with June revised down to reflect a 13,000-job loss the first monthly decline since the pandemic recovery.

Sectors such as healthcare continued to add positions, but industries, including manufacturing, construction, and government employment, recorded notable declines.

Analysts say the uneven performance reflects caution among employers in the face of higher borrowing costs, slowing consumer demand, and ongoing global uncertainty.

Markets reacted positively to the weak data, with stocks climbing on expectations that the Federal Reserve may respond with a rate cut as early as September.

Economists now widely predict at least a quarter-point reduction, with some forecasting a half-point move to cushion the slowdown.

The figures also carry political weight. President Donald Trump’s recent dismissal of the Bureau of Labour Statistics chief has drawn scrutiny, with critics accusing the administration of undermining confidence in official data.

Meanwhile, Trump’s trade and tariff policies have been cited by some economists as adding to the strain on businesses and manufacturing.

Despite the overall slowdown, the labour market remains stronger than during past downturns. However, experts warn that prolonged weakness in hiring could erode consumer confidence and dampen growth in the months ahead.