WASHINGTON, Sept 9 — The U.S. labor market is showing clear signs of deceleration, with August job gains slowing significantly and the unemployment rate climbing to a level not seen since late 2021, according to the Bureau of Labor Statistics (BLS).
Nonfarm payrolls increased by just 22,000 last month, a sharp drop from the roughly 147,000 monthly gains reported earlier in the year. June’s numbers were revised down to a loss of 13,000 jobs, marking the first monthly decline since December 2020. Over the past four months, average monthly job growth has been only 27,000, signaling a marked slowdown in hiring activity.
The unemployment rate rose to 4.3% in August, up from 4.2% in July. Economists note the rise reflects more people joining the labor force while fewer unemployed individuals were able to secure work, indicating growing softness in the labor market.
Revised Data Highlights Weaker Hiring
Updated BLS records show that from April 2024 through March 2025, the economy added 911,000 fewer jobs than initially estimated, based on revised state tax data. The adjustments point to slower growth across industries including leisure and hospitality, retail, and professional and business services.
Industry Trends Show Mixed Performance
In August, healthcare employment rose by 31,000, while social assistance added 16,000 positions. Job losses were seen in federal government employment (-15,000) and in mining, quarrying, and oil and gas extraction (-6,000). Overall manufacturing employment remained steady, though transportation equipment manufacturing fell by 15,000 positions, partly due to strike activity.
Economists say the slowing pace of hiring and rising unemployment could influence Federal Reserve decisions on interest rates and broader economic policy in the coming months.
The August data underscores a turning point in the U.S. labor market, suggesting that after years of steady expansion, job growth is losing momentum, and policymakers, businesses, and workers may need to adjust expectations accordingly.
