August Employment Data Shows Labor Market Deceleration The U.S. Department of Labor released August employment statistics on September 5, showing rising unemployment rates and non-farm payroll additions significantly below market expectations (75,000), indicating further labor market slowdown. The unemployment rate reached 4.3%, while the broader unemployment rate rose to 8.1% (highest level since October 2021). Non-farm payrolls increased by only 22,000, with June figures revised down to a decrease of 13,000 - the first decline since December 2020. The three-month moving average fell to 29,000, the lowest since the COVID-19 pandemic.
Consecutive Months Below Critical Threshold For four consecutive months, job growth has remained below the 100,000 threshold considered necessary to prevent unemployment increases, suggesting rapid labor market deceleration since the mutual tariffs announcement in April. Private sector declines were observed across manufacturing (-12,000), wholesale trade (-12,000), and professional services (-17,000). Average hourly earnings reached $36.5, up 3.7% year-over-year, though wage growth rates are showing gradual decline.
This employment report provides strong evidence supporting further interest rate cuts as the Federal Reserve responds to cooling labor market conditions.