U.S. Jobs Report Disappoints: Labor Market Cooling Signals Fed’s Cautious Path Ahead

U.S. Jobs Report Misses Forecast: Weak Nonfarm Payrolls Signal Labor Market Cooling

By James Hyerczyk | Updated: September 5, 2025, 13:18 GMT

The latest U.S. employment data shows signs of a cooling labor market. In August, nonfarm payrolls grew by 22,000. This number falls far short of the 75,000 jobs that market experts predicted. The report shows slower job gains and casts doubt on the strength of the U.S. economy and on the Federal Reserve’s money policy path.

Labor Market Momentum Slows Sharply

On Friday, the August data came out. The numbers show job creation was much weaker than expected. The unemployment rate edged up to 4.3% from 4.2%. This small rise shows weaker worker activity.

Even with a small payroll gain, average hourly pay grew 0.3% to $36.53. Yearly, wages increased by 3.7%. The labor force participation rate held at 62.3%. This rate stays lower than last year and shows little change in worker engagement.

Sector Performance Reflects Uneven Job Growth

Most new jobs came in health care and social assistance. Health care added 31,000 jobs while social assistance added 16,000 jobs. In health care, this total is lower than last year’s monthly average of 42,000 jobs. Most gains in social assistance came from family services positions.

At the same time, several sectors lost jobs. These losses balanced the small gains in some areas:

  • Federal government jobs fell by 15,000. This drop has been steady since January.
  • Jobs in mining, quarrying, and oil and gas extraction decreased by 6,000.
  • Manufacturing lost 12,000 jobs. Within this field, transportation equipment manufacturing lost 15,000 jobs because of strikes.
  • Wholesale trade dropped by 12,000 jobs over three months, with a total decline of 32,000 jobs.
  • Construction lost 7,000 jobs.
  • Professional and business services reduced by 17,000 jobs.
  • Financial activities cut 3,000 jobs.

On a brighter note, retail trade added 10,500 jobs. Leisure and hospitality gained 28,000 jobs, and transportation and warehousing added 3,600 jobs.

Workforce Indicators Suggest Tepid Labor Market Confidence

Long-term unemployment rose to 1.93 million people. This group now makes up more than one-quarter of all unemployed. New job seekers dropped by 199,000 after gains in the previous month. This fall may point to less confidence among those looking for work.

The employment-population ratio stayed at 59.6%. This flat figure shows that the share of Americans with jobs remains unchanged.

Market and Policy Implications

The weak jobs data and the rise in unemployment send a clear signal. The U.S. labor market is losing steam. This trend may affect the whole economy. It hints at lower consumer spending, which might slow economic growth.

For the Federal Reserve, the weak data may support a cautious approach in policy decisions. Slower job growth cools the rise in wages and prices. The central bank might pause any further hikes in interest rates to keep the recovery on track without deepening a slowdown.

Financial markets reacted by buying assets sensitive to rate changes such as U.S. Treasuries and technology stocks. At the same time, the U.S. dollar showed a weak trend as traders expect a gentler response from the Fed soon.

Summary

  • Nonfarm payrolls grew by 22,000 in August, a number much smaller than the forecast of 75,000.
  • The unemployment rate increased from 4.2% to 4.3%.
  • Average hourly pay increased by 0.3% to $36.53 while yearly wage growth was 3.7%.
  • Labor force participation held at 62.3%.
  • Job gains were seen in health care and social assistance while losses hit the federal government, manufacturing, and mining sectors.
  • Long-term unemployment and a drop in new job seekers point to less trust among those hunting for work.
  • Market views favor a gentle Fed approach, a stance that pushed rate-sensitive investments up and put pressure on the U.S. dollar.

This report shows that the U.S. labor market is weak. It highlights the hard path ahead for policy makers and investors in these changing times.

About the Author:
James Hyerczyk is a U.S.-based technical analyst and educator with more than 40 years of market analysis and trading experience. He studies chart patterns and price moves and has written two books on technical analysis.

The information here is for learning and informational purposes only and does not count as financial advice. Please do your own research and consult a financial advisor before making any decisions.

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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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France’s Confidence Vote: A Tipping Point for Budgetary Stability?

France: Upcoming Confidence Vote Adds to Budgetary Uncertainty Amid Political Fragmentation

September 5, 2025 – By Thomas Gillet, FXEmpire

France now faces political and economic doubts as a confidence vote nears on September 8, 2025. Prime Minister François Bayrou called this vote over a multi-year budget plan set forth in July. Disagreements in parliament and strong opposition add to worries about the country’s fiscal path.

Political Landscape Clouds Budget Prospects

The vote comes as France readies a debate on its 2026 budget. The plan seeks to save €44 billion (roughly 1.5% of GDP). Parties on the left, such as the Socialist Party, and groups on the far right, like Rassemblement National, take a stand against these savings. Together, these groups hold 298 seats, which is more than the 289 seats needed for a majority. This fact makes it hard for the government to gain support.

If the vote does not pass, the government could collapse for the second time in less than a year. President Emmanuel Macron would then face the task of naming a new prime minister—possibly the fifth in four years—or calling for early legislative elections. An election might lead to a divided parliament where extreme far-left or far-right forces control the votes. Such a split would keep lawmakers at odds.

Economic Implications and Fiscal Challenges

Political deadlock also slows plans to lower France’s budget deficit, which stood at 5.8% of GDP in 2024. The government hoped to reduce this figure to 5.4% in 2025 and 4.6% in 2026. Still, changes made to win parliamentary backing might keep the savings measures small. Scope Ratings now predicts the deficit may only fall to 5.6% in 2025 and then to 5.3% in 2026. Government borrowing costs are on the rise. Net interest payments are expected to grow from 3.6% of government revenue in 2024 to about 4% in 2025. This level matches Belgium’s at 3.8% but stays below Spain at 5.2% and the United Kingdom at 6.6%. Ten-year government bond yields have reached 3.5%, a figure seen in both Spain and Italy. This climb shows that investors worry about France’s fiscal health.

Scope Ratings expects France’s debt-to-GDP ratio to keep growing, reaching around 122% by 2030. This outcome exceeds the government’s target of 117% by 2029. Political splits and modest budget cuts drive this steady rise in debt.

Outlook and Upcoming Risks

A positive result in the confidence vote could mean short-term progress on budgets. Yet, politics remain divided. Local elections in March 2026 and presidential elections in April and May 2027 add to the tension. These events may slow agreement on needed economic changes.

France’s outlook in the midterm stays constrained by a divided parliament. Political doubt may block steps to cut the deficit. The upcoming vote stands as a key moment that will shape French fiscal policy and political calm in the near term.

About the Author:
Thomas Gillet is a Director in Sovereign and Public Sector Ratings at Scope Ratings. His work focuses on sovereign credit analysis and fiscal policy. Senior analyst Brian Marly helped produce this report.

For a complete view of today’s economic events, visit FXEmpire’s economic calendar.

This article is for informational purposes only and should not be taken as financial advice. Readers should do their own research and consult professionals before making any investment decisions.

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UK Retail Sales Surge Challenges BoE Rate Cuts as GBP/USD Climbs to Morning High

UK Retail Sales Data Challenges Bank of England’s Rate Cut Expectations; GBP/USD Hits Morning High

By Bob Mason, Updated September 5, 2025, 06:17 GMT+00:00

UK retail sales grew last month, and this growth troubles plans for easing money policy. Consumer demand stays high, and that value makes traders doubt when rate cuts will come. The British pound moves up against the US dollar as markets adjust.

Robust Retail Sales Signal Resilient Consumer Spending

UK retail sales climbed 0.6% from June to July. Sales rose from 0.3% in June, and this beat forecasts of a 0.2% jump. Annual sales touched 1.1%, up from 0.9% the month before. Data show store-free sellers and clothing shops performing well. New items, mild weather, and busy events like UEFA Women’s EURO 2025 all help sales.
Consumer spending stays strong even when prices rise and the job market slows. Retail data like these may push up prices, which makes shops slow to cut rates.

Inflation and GDP Paint a Mixed Economic Picture

The sales report comes after recent numbers that put the Bank in a hard spot. UK inflation went from 3.6% in June to 3.8% in July. Core inflation moved slightly from 3.7% to 3.8%. These rates stand high against the Bank’s 2% goal. UK GDP grew 0.4% in June after a 0.1% fall in May.
Job numbers fall too. The Monthly Decision Maker Panel showed a 0.5% drop in jobs over the three months ending in August. Firms cut staff as they face higher costs in national insurance and minimum wages.

BoE’s Rate Cut Strategy in Question

The Bank sees a hard balance. Weak jobs might allow cuts, yet steady spending makes price rise more likely. Governor Andrew Bailey said he is less sure now about when or how fast cuts will come.
Markets now put a 25-point drop on hold until April 2026. Strong retail sales do not change this view much.

GBP/USD Reacts Positively to Retail Sales Strength

Before the sales news, the GBP/USD briefly reached $1.34187. When the sales came in, the pair moved up. It hit $1.34689 at its peak and closed near $1.34661, up about 0.25%. This move shows traders now expect slower steps toward easing in the near term.

What’s Next for UK Economic Data and BoE Policy?

Traders now watch for more UK reports. GDP numbers are set for September 12, employment figures come on September 16, and inflation data follows on September 17. These reports will shape the Bank’s next moves.
Some experts hesitate but think a rate cut could come sooner. ING points to a drop as early as November 2025, though high inflation might push that date back.

Conclusion

UK retail sales in July add weight to the Bank of England’s tough task. A weaker job market sits beside strong consumer spending and high inflation. That mix may hold back rate cuts. The British pound now stands stronger as investors wait for more data to clear the picture.

Stay tuned for updates on global money trends and central bank moves.

About the Author

Bob Mason brings over 28 years of financial industry work. He covers currencies, commodities, alternative assets, and stocks with a focus on European and Asian markets. His work has reached global rating agencies and large banks.

This article is meant to give information and should not be seen as investment advice.

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Trump & Japan Seal Trade Agreement: 15% Tariffs and $550 Billion Investment Unveiled

U.S. and Japan Finalize Trade Deal Featuring 15% Tariffs on Japanese Imports

September 4, 2025 — The United States and Japan have reached an agreement that starts a new economic era. U.S. President Donald Trump signed the order on Thursday to enforce the deal. The plan sets a clear 15% tax on nearly all products from Japan, including cars.

Key Elements of the Trade Deal

The deal came in July after long talks. Hard work on details fixed small issues. The plan has several parts:

  • Tokyo’s Commitment to Invest: Japan will send $550 billion to projects picked by the U.S. government. This promise shows a deeper side of shared investment.
  • Agricultural Purchases: Japan will buy more U.S. crops such as corn, soybeans, and rice. The plan pushes a 75% rise in rice imports. Japan also will take on $8 billion worth of other U.S. crop items.
  • Commercial Aircraft and Defense Equipment: Japan will take U.S. commercial planes. The order for 100 Boeing jets gives a boost to the air trade.
  • Market Access Improvements: The new deal clears new ways in fields like manufacturing, plane-building, farming, and cars. This change should open more paths for U.S. companies.
  • Sector-Specific Tariffs: Besides the main 15% tax, Japan will pay extra on cars, car parts, aerospace goods, common drugs, and natural resources.

The order makes sure no extra taxes fall on Japanese products beyond the agreed sums. Tax relief for cars starts seven days after the order. These taxes apply to products that entered the U.S. from August 7, 2025. ### Economic Implications and Industry Impact

This tax rule is part of President Trump’s wider global campaign on tariffs. It has upset supply lines, especially in Japan’s key car sector.

  • Toyota’s Warning: Toyota says it will lose nearly $10 billion. The extra cost cuts its profit forecast by 16%.
  • U.S. Automotive Rivals: Ford and General Motors expect losses too. Ford faces a $3 billion loss while General Motors may lose up to $5 billion.

Political Ramifications in Japan

The deal comes as Japan faces more political strain. Prime Minister Shigeru Ishiba feels pressure after the July vote by his party. The Liberal Democratic Party lost ground because of:

• Limited plans to control rising prices
• Remains of past political faults
• Low interest among young voters

Some insiders want a change of leader. Analysts at Eurasia Group see a 60% chance that Ishiba will lose the vote on Monday. The vote may force him to step down because of growing party dissent.

Next Steps and Diplomatic Engagements

Japan’s top trade envoy, Ryosei Akazawa, recently went to Washington. He carried an invite from Prime Minister Ishiba for President Trump to visit Japan. This move shows that talks will keep going, even with a tough deal in place.

This trade deal marks a big shift in U.S.-Japan economic ties. It mixes a set tax with moves on investment and market change. As the plan takes effect, its effects will shape trade and politics in both lands.

For more news on this story and other market updates, stay tuned.

Reported by Anniek Bao, CNBC

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Bank Regulator Highlights Silver Linings Amidst Toronto’s Condominium Market Challenges

Condominium Market Challenges Offer Silver Lining, According to Canada’s Banking Regulator

By Barbara Shecter, Financial Post — September 3, 2025

Toronto – Canada’s urban condominium markets face challenges. The GTA and Vancouver show slowing condo sales and rising inventories. Peter Routledge, head of the Office of the Superintendent of Financial Institutions (OSFI), sees hidden benefits in these trends. He links the tough market conditions closely to potential gains for buyers.

At the Scotiabank Financials Summit in Toronto on Wednesday, Routledge focused on the slowdown in sales and increase in new condo inventories. He noted that Toronto lost 75 percent of its condo sales from 2022 to 2025, while Vancouver saw a 37 percent drop. Despite these falls, he stressed that Canada’s banks are still strong and well-capitalized to handle these issues.

Oversupply and Price Adjustments

In the GTA, the market shows a clear oversupply. New condo completions rise quickly. A report from Altus Group Ltd highlights both the oversupply and the steady stream of new builds. This excess pushes down prices and rents during the first half of 2025. Data released in June by Canada Mortgage and Housing Corp. (CMHC) backs this view. It reports fewer sales, nearly double the inventories, and softer prices across urban Canada. These trends follow a long phase of high prices and a low supply of housing.

A Market Correction Helping Affordability

Routledge sees the slowdown as a chance to improve affordability. He explained that not long ago, many noted the lack of housing units for Canadians. Now, the buildup of condo supply can help young buyers. Prices are falling from their high peaks, which may help first-time buyers enter the market.

This market correction can make owning a home more reachable by easing pressure on prices.

Banking Sector Preparedness and Market Resilience

OSFI has set up strong safeguards to support banks. They have set clear capital requirements and stress-tested mortgages. These steps help banks manage shocks from the real estate sector. Even though risks remain—especially in commercial real estate and slow-selling condo projects—the system stays robust. Routledge reassured that if stability is the focus, the system is doing well.

Letting the Market Find Its Level

Routledge agreed that some condo developments may fall short of investor hopes. Still, he favors market forces over strict regulation. He said, “We have the resilience already. The goal is to let the market decide the price that will bring young Canadians in so they can afford a home.” His words stress that careful letting of supply and demand should set the right prices.

Broader Implications

While a slowing condo market might seem bad at first, it can help balance Canada’s urban housing supply. This shift may ease long-standing affordability issues and open the door for new buyers. The challenge may not spell disaster for everyone but instead point to a more accessible housing market in major cities.

Contact: Barbara Shecter, bshecter@nationalpost.com
Financial Post
Photo credit: Peter J. Thompson / Financial Post

Related Reads:

  • ‘From bad to terrible’: Toronto’s market for new condos has fallen off a cliff
  • Investor mortgages have surged: 12 financing questions for new landlords

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August Job Growth Plummets: U.S. Adds Just 54,000 Jobs Amid Labor Market Concerns

U.S. Labor Market Growth Slows in August as Only 54,000 Jobs Are Added, ADP Says

The U.S. private sector grew much slower in August. The report from payroll processor ADP shows the economy added only 54,000 jobs. This is well below what many economists had forecast. It also shows more worry about the job market in the coming months.

Key Report Points:

  • Private payrolls grew by 54,000 jobs in August. Economists had expected 75,000 jobs, as seen in a survey by Dow Jones.
  • The growth in August is much lower than July’s revised increase of 106,000.
  • Job gains varied. Some fields lost jobs while others added a few.

Breaking Down the Sectors

Some fields showed clear weakness:

  • Trade, Transportation, and Utilities lost 17,000 jobs.
  • Education and Health Services dropped by 12,000 jobs.
  • In contrast, Leisure and Hospitality added 50,000 jobs. This suggests that roles with direct customer contact still have high demand.

Wage Trends Stay Stable

Even with slow hiring, wages did not change much:

  • Workers who kept their jobs earned about 4.4% more over the year.
  • Workers who changed jobs earned about 7.1% more during the same period.

What May Cause the Slowdown

ADP’s chief economist, Nela Richardson, said, "The year started with strong job growth, but that strength is now shaken by doubt." Many point to high consumer worries, ongoing worker shortages, and issues brought by new tech as reasons for the slow pace.

More Concerns About the Labor Market

The ADP report adds to the growing list of signs that the job market is facing trouble:

  • Initial jobless claims climbed to 237,000. This is 8,000 more than before and higher than predictions.
  • The government’s Job Openings and Labor Turnover Survey (JOLTS) showed some of the lowest job openings since 2020 as of July.

These facts hint that employers are more careful with hiring when the future is uncertain.

Market and Federal Reserve Views

The weak job numbers have affected financial markets. Traders now expect the Federal Reserve to cut interest rates in its September meeting. The CME’s FedWatch tool now shows a 97.4% chance of a rate cut, up from 96.6% the day before.

Looking Ahead: The September Jobs Report

Attention now shifts to the official U.S. government report coming Friday morning. Economists predict that around 75,000 non-farm payroll jobs will be added in August. This number matches the revised job gain in July. The unemployment rate might also rise a bit to 4.3%, up from 4.2% in July.

These numbers will play a key role in how people view future economic growth and in the decisions on monetary policy.

The slow job growth in the labor market highlights the many challenges in the U.S. economy. Some fields show strength, while others seem to weaken. This mixed picture comes at a time when the country faces changes brought about by new technology and ongoing concerns about the economy.

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Escalating Trade Tensions and Market Volatility: China’s Strategy as 90-Day Truce Nears Its End

China: Trade Tensions Rise as Truce Nears Expiry, Markets Face Fresh Risks

By Bob Mason — September 4, 2025, 04:21 GMT

The 90-day trade war pause between the United States and China ends in October. Tensions grow and new risks shake global markets. China shows signs of worry as unemployment climbs, consumer demand fades, and investors act with care on Mainland and Hong Kong exchanges.

Strengthening BRICS Ties and Global Trade Changes

At the recent SCO Summit, China built stronger ties with BRICS nations. Leaders from Russia, India, and North Korea met here. This move shifts China’s focus away from depending on the US in trade. President Xi Jinping spoke of using the shared strength of SCO members to boost trade and investment. His words stressed the power of their large markets and matched economic roles.

The US did not like the outcome. President Trump made a sarcastic comment. He said, "give my warmest regards to Vladimir Putin and Kim Jong Un, as you conspire against the United States of America." His tone pointed to a tougher US stance after months of calm.

Changing Trade Paths and Export Shifts

After the US extended the truce in August, China’s trade hopes grew for a full agreement. Meetings between Chinese negotiator Li Chenggang and US officials did not bring clear progress. Trade tensions came back as the truce nears its end in October.

China now tries to widen its export markets. It targets Southeast Asia and nearby regions to make up for fewer shipments to the US. Leland Millar, CEO of China Beige Book, said in a Bloomberg interview that China pushes its exports into new markets. His words show that China sells goods at lower prices in these countries. The move sends extra capacity into markets that seem weak in money and politics.

Mounting Economic Pressures

Exports rose by 7.2% in July, compared to 5.8% in June. Yet, data from the private sector shows caution. The August PMI data pointed to higher input costs and tougher competition. This squeeze on profit led many firms to cut staff.

Unemployment joined the concern. The overall rate went from 5.0% in June to 5.2% in July. Youth unemployment jumped to 17.8%, up from 14.5%. These changes may cut household spending and hurt consumer confidence. Retail sales growth also slowed to 3.7% in July, down from 4.8% in June. In response, Beijing started a consumer loan subsidy program to boost household spending and the domestic economy.

Market Reactions and Outlook

On September 4, financial markets reacted with losses. The CSI 300 and Shanghai Composite indexes fell by 2.24% and 1.71%. Hong Kong’s Hang Seng Index dropped by 1.2% in early trading. Investors worry about falling margins, weak external demand, and rising unemployment.

Reports say Chinese regulators may act to cool the stock market. They are thinking of removing bans on short selling. They also may add rules to limit speculative trading.

Even with this turbulence, Mainland markets still show year-to-date gains. The CSI 300 and Shanghai Composite have increased by about 10.4% and 11.5%. The Hang Seng Index has nearly a 25% gain, outpacing major global indexes like the Nasdaq Composite.

What Lies Ahead?

With the truce deadline near, all eyes turn to upcoming trade talks and the next economic reports. The services sector may soon show more signs of pressure or recovery. Finding a balance between handling trade risks and boosting local spending will be key for Beijing in the short term.

Investors and policymakers watch to see if new stimulus can slow the downward slide or if hotter US-China tensions will push markets into more risk in the weeks before the truce ends.

For continuing updates on China’s economic path and global market news, stay tuned to FXEmpire.

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TD Bank’s $1 Billion Anti-Money Laundering Overhaul: A Major Milestone in Compliance and Technology

TD Bank Marks Significant Progress in Overhauling Anti-Money Laundering Program

By Naimul Karim, Financial Post | September 3, 2025

Toronto-Dominion Bank (TD) stands as Canada’s second-biggest bank. It reached a major milestone in revamping its anti-money laundering program in the U.S. The bank now fixes past faults that cost it billions in fines and slowed its operations.

A Collaborative Approach to Strengthening AML

Leo Salom leads TD Bank’s U.S. operations. He spoke at the Scotiabank Financials Summit in Toronto about the bank’s progress. TD set up a team of 40 top executives. These experts came from leading banks and law agencies. They include members from Homeland Security and the FBI. This small, skilled group brings solid experience. It shows TD’s will to build a strong and clear compliance system.

A Response to Previous Regulatory Penalties

U.S. regulators took punitive action about a year ago. They fined TD billions and limited its growth. The bank had failed to spot money laundering in its American branches. In response, TD began a clear fix plan to mend the problems and restore trust.

Investment in Advanced Technologies

TD is spending nearly $500 million in 2025 to upgrade its AML system. The bank plans to spend a similar amount in 2026. At the core of this work is new technology. TD recently launched a transaction monitoring platform that spots suspicious activity. It also introduced a new system to rate customer risk. In the last quarter, TD added two machine-learning tools. One tool finds unusual transactions; the other checks negative media alerts. These steps mix smart technology with close monitoring.

Positive Financial Indicators

TD’s AML overhaul comes with strong financial signs. For the quarter ending July 31, 2025, TD earned a net income of $3.3 billion. Last year, the same quarter ended with a $181 million loss due to AML costs. Growth in Canada’s personal and business banking, along with gains in wealth management and insurance, drove the profits. Salom said most key actions to overhaul the program should finish by year-end.

Looking Ahead: Continued Milestones Beyond 2025

Despite the progress, Salom said more milestones lie ahead in 2026 and 2027. The bank aims to build a sustainable and scalable AML system. Its tech upgrades are meant to create a world-class system now and speed up future fixes. This strategy strengthens TD’s long-term management. Global banks now boost their monitoring to stop financial crime. TD plans to protect its name and meet new standards with care.

For further updates and detailed business coverage, subscribe to Financial Post.

Contact:
Naimul Karim
Email: nkarim@postmedia.com

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RBC’s Dave McKay Warns: Trade Talks Pose Major Risks for Canada’s Economy and Banking Sector

RBC CEO Dave McKay Identifies Trade Talks as Biggest Economic and Banking Risk in Coming Quarter

Toronto, September 3, 2025 – Dave McKay leads the Royal Bank of Canada. He points to trade talks as the main risk for Canada’s economy and banks. He spoke at the Scotiabank Financials Summit in Toronto. He noted that RBC had strong quarterly results. However, he warned that the talks over the Canada-United States-Mexico Agreement (CUSMA) add a risk of change. McKay keeps his ideas clear: trade talks now affect banks and growth.

Encouraging Earnings Amid Economic Uncertainty

Canada’s Big Six banks share good earnings. These gains show that Canada might grow again. RBC’s quarterly numbers, ending July 31, show clear stability. McKay said trade talks with the United States will largely shape Canada’s future. He said, “There’s a source of potential volatility going forward.” He meant that the talks over CUSMA might lead to change. Even though he is hopeful, McKay notes a risk. The trade deal once helped shield the economy from U.S. tariffs. Changes in that deal can shift client demand and affect growth.

Economic Contraction and Policy Implications

Canada’s economy shrank by 1.6 percent in the second quarter of 2025. Statistics Canada shows that the drop came from low exports. U.S. tariffs caused a sharper fall than many had predicted. This drop matched the Bank of Canada’s July forecast. We now see more talk of a possible interest rate cut. Desjardins economist Royce Mendes said rates might drop after three meetings held at 2.75 percent.

Continued Uncertainty in Trade Policy

Darryl White leads Bank of Montreal. He shared a view like McKay. He said that trade uncertainty remains. He noted that Canada shows some signs of growth. But he warned that Canada still trails the United States. White said, “There isn’t a full understanding yet of whether we are going to preserve CUSMA.” He sees a good story for business but notes a pause in trade action. He expects Canada’s growth to rise when trade fixes settle.

Financial System Resilience

Peter Routledge heads the Office of the Superintendent of Financial Institutions. He stated that Canada’s financial system stands ready. He said the system will help Canada face global change. His words showed strength in a time of uncertainty.

Looking Ahead

Canada faces hard choices as trade talks and global headwinds press on. The banks and leaders stay alert. They watch economic signs and trade news closely. The future of the CUSMA talks matters a great deal.

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