August 2025 Jobs Report: A Stalling Labor Market Signals Economic Turbulence Ahead

August 2025 Jobs Report: Payroll Growth Slows Sharply, Indicating Hiring Weakness

Published September 5, 2025 – Updated Minutes Ago

The U.S. labor market shows slow growth. Payrolls grew by 22,000. This number falls far short of the 75,000 forecast by economists from Dow Jones. The slow gain points to fewer new hires. The economy and current monetary policy add to the worries.

Key Highlights from the Report

Payrolls rose by 22,000. In July, payrolls had risen by 79,000, and June ended with a net loss of 13,000 jobs.
The unemployment rate climbed to 4.3%, as more people joined the labor force.
Average hourly earnings increased 0.3% for August. The yearly growth in wages reached 3.7%, a bit less than the expected 3.8%.
Sector details:
- Health care gained 31,000 jobs.
- Social assistance added 16,000 jobs.
- Wholesale trade and manufacturing each lost 12,000 jobs.
- The federal government saw a drop of 15,000 jobs, which slowed overall progress.

Labor Market and Economic Context

The report shows that the job market is slowing down from earlier months. Daniel Zhao, chief economist at Glassdoor, says the market now lacks the speed seen before. He warns that the slow pace of hiring may make it hard to achieve a smooth economic slowdown.

The household survey shows:

An increase of 288,000 employed persons.
A rise of 148,000 unemployed persons.
The labor force grew by 436,000, which brings the participation rate to 62.3%.
When we include discouraged workers and those working only part-time by choice, the rate now is 8.1%. This is the highest level since October 2021. ### Market Reactions and Federal Reserve Outlook

The jobs numbers did not worry the market too much. At the opening bell, stocks moved up while Treasury yields fell. The CME Group’s FedWatch tool now shows that traders expect a quarter-point rate cut at the Federal Reserve meeting on September 17. There is also a small chance for a larger half-point cut.

Federal Reserve officials remain cautious. They note that while layoffs stay steady, hiring is falling. This slowdown adds pressure on the Fed to cut rates even as inflation worries persist because of ongoing tariff issues.

Recent Leadership Changes at the Bureau of Labor Statistics (BLS)

This is the first report since President Trump fired former BLS Commissioner Erika McEntarfer. Her removal came after the July report showed weak job creation and big downward revisions. Trump nominated economist E.J. Antoni to lead the agency, while William Wiatrowski serves as acting commissioner for now.

Looking Ahead: Benchmark Revisions and Economic Outlook

The BLS will release its annual benchmark revisions later today. These revisions may change past numbers to give a clearer view of recent trends. Some experts, including National Economic Council Director Kevin Hassett, expect the August payroll figure to rise after revision. In past years, early August estimates have often come in too high.

Olu Sonola at Fitch Ratings noted that four months of job losses in manufacturing stand out. Tariff issues seem to keep hiring low in many areas.

Summary

The August 2025 report shows a clear slow down in hiring. Job gains fall short of forecasts, and unemployment rises. Health care shows gains while manufacturing shows losses. The signs point to a slower job pace. Many expect that the Fed will cut rates to help keep the economy growing.

For continuing coverage and updates on economic indicators, Federal Reserve decisions, and market impacts, stay tuned to CNBC.

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