The U.S. Adds Only 22,000 Jobs in August, Signaling dramatic slowdown in the labor market
The August employment update marks the first since President Trump removed a top Labor Department official, accusing her of releasing faulty statistics.
Government figures released Friday showed that U.S. job creation has nearly come to a halt.
According to the Bureau of Labor Statistics (BLS), the economy generated just 22,000 jobs in August — far short of the 75,000 that analysts expected. Revised data also revealed that June actually saw a net job loss, though July’s results were adjusted upward by a modest margin.
All told, the U.S. has added 598,000 jobs since January, compared with more than 1.1 million during the same period in 2024. The unemployment rate edged up to 4.3%, its highest point outside the pandemic era since September 2017.
The weak numbers have fueled mounting concerns that Trump’s economic agenda is steering the nation toward sluggish growth paired with persistent inflation.
More than 25% of the unemployed have now been out of work for over half a year — the worst reading since mid-2016.
“The labor market engine that has powered U.S. growth for the last four years is sputtering,” wrote Wells Fargo senior economist Sarah House. “The weakness spans across industries, making a quick rebound unlikely.”
Wall Street’s major indexes, which opened at record highs Friday morning, reversed course and fell into the red as investors digested the report. Cheaper borrowing costs typically support corporate earnings, but that benefit depends on consumer demand holding steady.
Trump entered office vowing to supercharge economic growth. While key measures remain solid, momentum began slipping toward the end of the Biden years.
Instead, Trump’s tariff drive and sweeping attempts to slash federal spending — many still tied up in legal battles — have created new uncertainty, discouraging companies from expanding their workforce.
The trade measures have also kept inflation concerns alive. Although consumer prices have cooled significantly since the post-pandemic surge in 2022, inflation continues to run above the Federal Reserve’s 2% goal.
That dynamic has left the Fed, which Trump has repeatedly pressed to cut rates, in a difficult spot. Lowering rates could stimulate activity, but risks fueling inflationary pressures.
“Jerome ‘Too Late’ Powell should have acted sooner,” Trump wrote on social media Friday after the jobs release. “As usual, he’s ‘Too Late!’”
So far, Fed officials have resisted cuts, wary that tariffs will worsen price growth. But many investors now anticipate that continued weak jobs reports will push the central bank toward lowering rates at its next policy meeting later this month.
“The August data should accelerate two important steps,” said Scott Paul, head of the Alliance for American Manufacturing. “First, a Fed rate cut. Second, resolving tariff disputes and trade agreements so businesses have the clarity to hire, invest, and reconfigure supply chains. Manufacturing will stagnate until then.”
Friday’s update was the first following Trump’s dismissal of BLS chief Erika McEntarfer, who was accused of releasing “bad data.” Economists largely rejected that claim and warned her firing risks politicizing a traditionally nonpartisan agency.
On Thursday evening, Trump said the “real numbers” would appear “next year,” without offering details. Commerce Secretary Howard Lutnick said Friday that government data quality would improve after personnel changes.
The White House has not responded to media requests for comment.
Trump has nominated E.J. Antoni to lead the BLS. Antoni, who serves as chief economist at the Heritage Foundation, has faced criticism for his interpretation of economic statistics. Before his nomination, he suggested halting the monthly jobs release — an idea economists warned could destabilize global markets, which rely heavily on timely U.S. employment figures.
Supporters have praised Antoni’s selection. “He is one of the sharpest economic minds in America and a truth-teller who prioritizes families over elites,” Heritage Foundation President Kevin Roberts said. Antoni is awaiting Senate confirmation.
Meanwhile, other indicators of labor market weakness have mounted. Earlier this week, the BLS reported little change in hiring and separation rates for August. It also said job openings in July dropped to their lowest level in 10 months, though data from Indeed showed a gradual pickup since mid-July.
Private payrolls firm ADP reported Thursday that just 54,000 jobs were added in August, well below forecasts. Separately, Challenger, Grey & Christmas said layoffs spiked 39% from July, while planned hiring of 1,494 workers marked the lowest August figure since it began tracking in 2009.
The consultancy noted that federal cuts, tariff effects, bankruptcies, and store closures were among the most common explanations for slower hiring.
“September usually brings major seasonal hiring plans, which signal retailers’ holiday outlook,” the firm said. “Following the weakest August on record, it may be a warning sign.”
Trump officials have claimed that employment prospects are improving for native-born workers, but economists caution that these conclusions rest on statistical quirks. Data shows the unemployment rate for U.S.-born workers rose to 4.6% in August, the highest in eight years.
“The administration will likely argue that immigration policy is boosting jobs for native-born workers, but that is simply untrue,” wrote Ben Zipperer, senior economist at the Economic Policy Institute. “In fact, labor market conditions for U.S.-born workers in 2025 are worse than in recent years.”