Tag Archive for: Inflation

China’s Retail Sales Disappoint: Economic Growth Concerns Impact Currency and Markets

China Retail Sales Miss Forecast, Growth Concerns Resurface; AUD/USD and Hang Seng Retreat

By Bob Mason
Updated: September 15, 2025, 02:55 GMT

In August 2025, China’s retail sales did not meet the forecast. Sales grew by 3.4% year-on-year in August. The expected growth was 3.8%, and July had seen a rise of 3.7%. This gap in consumer spending adds worry about the strength of China’s economy.

Unemployment rose in June, moving from 5.2% in July to 5.3%. The rise in joblessness makes the labor market seem weaker. This trend may lower consumer trust and spending, which are key to the economy.

Housing prices have dropped for four months in a row. Used home prices fell 0.58% from the previous month, a larger drop than in July. New home sales also fell. Year-on-year, house prices decreased by 2.5% in August. Although this is a slight improvement from July’s 2.8% drop, it still worries market watchers. Stocks in the real estate field felt the impact, with the Hang Seng Mainland Properties Index falling by 1.25% during early trading on Monday.

Industrial output grew at 5.2% year-on-year in August. This is slower than July’s 5.7% and below the expected 5.8%. Export performance also slowed, dropping from 7.2% in July to 4.4% in August amid tariff effects.

Investors acted quickly on the news. The Hang Seng Index fell to 26,420 on September 15 before a small recovery to 26,450. The Australian dollar went down against the US dollar; AUD/USD dropped from 0.66584 to 0.66551, then bounced back slightly to 0.66552. US-China trade tensions add to the doubt. Trade talks picked up briskly in Madrid. The talks cover tariffs and issues including TikTok’s future. This situation adds more uncertainty for investors.

Looking ahead, China faces hard challenges in reaching its 5% GDP growth target for 2025. Weak consumption, a stressed labor market, and lower exports all work against this goal. Market watchers now keep a close eye on policy steps in housing, spending, and jobs. At the same time, the path of US-China trade talks stays key. Progress on tariffs may bring needed support to local markets while rising disputes may worsen the challenges.

Investors and traders are urged to keep a careful view given the latest news and global developments.

About the Author

Bob Mason brings over 28 years of experience in the financial sector. He has worked with global rating agencies and multinational banks. His work centers on currencies, commodities, alternative asset classes, and equities, with a focus on markets in Europe and Asia.

For more updates on market trends, economic numbers, and policy changes, stay tuned to FXEmpire’s full coverage.

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UK Economy Stalls: BoE’s Rate-Cut Challenge and GBP/USD Response

UK Economy Loses Momentum, BoE Faces Tough Rate-Cut Dilemma; GBP/USD Dips

By Bob Mason | Updated: September 12, 2025, 06:20 GMT+00:00

Recent UK data shows growth slowing in July. The report forces the Bank of England to decide: keep high rates as inflation stays high, or ease policies amid weak growth. The GBP/USD pair fell a bit when the GDP figures were released.

UK GDP Growth Stalls in July

The UK economy slowed in July. In June, the economy grew by 0.4%, but in July the overall GDP stayed the same. The Office for National Statistics shows that the month ended with no growth.

Monthly, services output barely increased by 0.1% in July after a 0.3% gain in June. Production dropped by 0.9% in July after growing 0.7% in June. Manufacturing, a large part of production, fell by 1.3% in July after a 0.9% rise in June. These closer links between data points raise a worry about the UK’s economic strength.

Over the three months ending in July, GDP growth slowed to 0.2%, down from 0.3% for the three months ending in June. These changes show a broad slowdown.

Inflation Presents a Policy Puzzle for the Bank of England

The slowdown appears when inflation is still high. Headline inflation rose to 3.8% in July, up from 3.6% the month before. Core inflation also climbed. The inflation rate for services went up to 5% year-on-year in July from 4.7% in June. With services affecting the overall count more, this rise makes the inflation picture harder to read.

BoE Governor Andrew Bailey noted, “There is now considerably more doubt about exactly when and how quickly we can move those further steps.” His words show that the timing and speed of any change remain unclear.

The job market is steady, with unemployment at 4.7%, and wages continue to grow. Some economists say the Bank may cut rates only when inflation and wages slow down more clearly.

Upcoming Data Will Influence the Outlook

Key UK numbers are set for mid-September. Inflation figures will come on September 15, and labor market data will follow on September 17. If these reports show a clear drop in inflation and slower wage growth, market views of a November rate cut may gain strength.

GBP/USD Market Reaction

After the GDP data came out, the GBP/USD pair slipped. Before the report, the pair briefly rose to $1.35804, then dropped to a low of $1.35496. By September 12, it was about 0.15% lower at $1.35507. The BoE’s tough decision contrasts with views that the U.S. central bank may cut rates next week. This split in paths may push the GBP/USD pair below the $1.35 level if the BoE decides to cut rates.

Conclusion

The UK economy’s weak growth in July and rising inflation have put the Bank of England in a tight spot. Slow GDP would normally call for lower rates, but stubborn inflation in the services sector and a steady job market mean any cuts may wait until there is a clear sign of easing. Traders and investors now watch the upcoming inflation and labor data for clues about the Bank’s next move and the future path of the British pound.

About the Author
Bob Mason has over 28 years of experience in the financial industry, covering currencies, commodities, alternative assets, and global equities with a focus on European and Asian markets.

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Surging U.S. Inflation Reaches 2.9% in August: The Impact of Shelter and Energy Costs

U.S. Inflation Reaches 2.9% in August, Fueled by Rising Shelter and Energy Costs

By James Hyerczyk | Updated: September 11, 2025, 12:39 GMT

Recent U.S. inflation data shows consumer prices growing fast. The CPI went up 0.4% in August—a jump twice as big as in July. Over the past year, inflation reached 2.9%, up from 2.7% in July. Higher costs in housing, food, and gasoline play a large role. These higher prices spur talks on how the Fed will act next.

CPI Growth Shows Continued Price Pressure

The CPI increase of 0.4% comes in sharper than many expected. Shelter costs lead this rise. In August, shelter prices climbed 0.4% and are 3.6% higher over the year. This data confirms a tight housing market. The core CPI, which ignores food and energy, grew 0.3% this month and rose 3.1% over the year. Price pressure spreads through the economy.

Within core measures, rent for homeowners increased 0.4% while primary rent went up by 0.3%. Airline fares jumped 5.9% from last month. Prices for used cars rose 1.0%, and apparel prices grew 0.5%. In contrast, medical care costs fell 0.2%, with lower dental and drug prices giving slight relief amid rising costs elsewhere.

Food Prices Rise, Driven by Grocery Gains

Food prices also climbed in August. The food index grew 0.5% and food-at-home prices increased 0.6%. All six major grocery groups saw price hikes. Fruit and vegetable prices jumped by 1.6%, with tomato prices up 4.5% and apple prices up 3.5%. Prices for meat, poultry, fish, and eggs went up 1.0%, led by beef prices that rose by 2.7%. This path pushes the annual food index up 3.2%, outpacing overall inflation.

Energy Prices Bounce Back on Gasoline Gains

Energy prices turned up by 0.7% in August after a drop in July. Gasoline costs rose 1.9% in a seasonally adjusted move, bouncing back from a 1.1% drop. Meanwhile, natural gas prices sank 1.6% and electricity prices edged up 0.2%. Over the year, energy inflation is low at 0.2%, with gasoline still 6.6% lower than last year.

Market Impact and Fed Policy Views

Sticky inflation, seen in core CPI and shelter costs, makes quick Fed rate cuts seem less likely. Many experts expect the Fed to keep rates steady at the September meeting. Rising costs in food and travel add to the price pressure. Investors watch bond yields and a strong U.S. dollar with care. Stock markets may face more risk as borrowing costs rise.

Market Outlook

Strong August inflation keeps the U.S. dollar firm against low-yield coins. Bond yields may continue to rise as the market adjusts to a longer period of high rates. Stock markets may see short swings as ideas of quick rate cuts fade and investors settle into a longer phase of tight money.

About the Author

James Hyerczyk is a seasoned U.S.-based technical analyst and educator with over four decades in market study and trading. He studies chart patterns and price moves deeply. He has written two books on technical analysis and knows much about stock and futures markets.

For continued coverage on macroeconomic indicators, market forecasts, and financial news, stay tuned to FXEmpire.

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Navigating the Tensions: China and the US Trade Showdown Amid Deepening Economic Strains

China Faces Trade Showdown as Tariff Truce Masks Deepening Strains

By Bob Mason
Updated: September 11, 2025, 02:45 GMT

Overview

The US and China set a trade pause. This break stops a steep tariff rise now. Under this calm, hard disputes grow. Tariff conflicts, supply chain issues, and rare earth problems still trouble both sides. These fights stress China’s plans for steady growth and shake market trust.

Trade Truce Extension: A Temporary Pause

In August 2025, US and China extended their trade calm for 90 days. This step stops the start of a 145% tariff on many Chinese goods. The pause does not solve other trade issues. In Geneva, both sides met for two days. China agreed to lift some limits on rare earth exports. The US agreed to ease rules on semiconductor chips. Later talks in London and another break did little to clear mistrust or bring a full trade plan.

Rising Geopolitical Pressures

US moves against China get more complex. The US added tariffs to fight against goods sent through third countries. Firms forward goods from Vietnam and Indonesia to avoid steep fees. Vietnam now pays a 40% tariff on some shipments, and Indonesia pays a 19% fee. Vietnamese exports to the US dropped by 2% in August. At the same time, Vietnamese imports from China also fell by 2%. Rumors spread about US plans to require firm proof of product origin. Such steps could hurt China’s trade edge.

US officials also pressured the European Union to set 100% tariffs on some goods from China and India. This push aimed to cut Russian oil purchases and nudge Moscow on the Ukraine matter. The call came during a meeting of the Shanghai Cooperation Organization, where leaders like Russian President Vladimir Putin and Indian Prime Minister Narendra Modi appeared.

US officials reopened trade talks with India. Former President Trump spoke of ending trade blocks. This change may lower India’s Russian oil buys and shift how its economy links with China.

Chinese Economy Under Stress

Trade fights now hurt China’s economy. Its exports to the US fell 33% compared to last year in August. Growth slipped from 7.2% in July to 4.4% in August. Unemployment climbed from 5.0% to 5.2%, while jobless numbers among the young jumped from 14.5% to 17.8%. These shifts hit workers hard.

Lower sales in shops now worry many about hitting a 5% growth target. In response, the government plans new help for workers and trade. On September 10, the National People’s Congress met. Leaders stressed using the budget to bring back balance to the economy.

Economist Robin Brooks from the Brookings Institution said, "China loses ground. Its US exports dropped 24% in one quarter. Exporters must choose: shift goods or cut prices. Both paths hurt earnings and push prices down."

Mainland Markets Stay Steady

Despite the stress, Chinese stock markets hold up well. The CSI 300 and Shanghai Composite Index rose near 13%. The Hang Seng Index climbed over 30%. Local buyers and money from abroad keep the markets active.

Beijing works to keep the economy safe. Yet trade talks, a housing crisis, and weak local buying still risk the future. A shaky job market can slow spending and mind share.

A solid trade deal with the US might boost exports, raise company profits, grow jobs, and lift spending. That boost would support growth and push stocks higher.

The Road Ahead

Investors watch as China plans to share new data soon. Reports on retail sales and industrial output will appear on September 15. Those numbers will show if a small stumble starts a larger drop.

If spending and output rise, market hope may grow fast. Stocks could hit high levels in 2025. But if low news continues and prices fall, Beijing may miss its goals and need more policy moves.

With trade fights still burning and political stress on the rise, China stands at a turning point. How it balances trade plans and wins back market trust will shape its future and that of the global scene.

Contact: For more updates on the US-China trade scene and market views, stay tuned to FXEmpire.

Related Reads:

  • "China Ready for Global Pivot as US Trade Tensions Deepen Economic Risks"
  • "US Jobs Report Misses Forecast: Weak Nonfarm Payrolls Signal Labor Market Cooling"
  • "Surprise Drop in PPI Strengthens Case for September Fed Rate Cut"

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PPI Plummets: New Data Fuels Expectations for Fed Rate Cut in September

Surprise Drop in Producer Price Index Bolsters Expectations for September Federal Reserve Rate Cut

By James Hyerczyk | Updated: September 10, 2025, 13:06 GMT

In a surprising turn, U.S. wholesale data for August shows the Producer Price Index (PPI) dropping. This drop makes many think that the Federal Reserve may cut rates in its next meeting.

Key Highlights:
• U.S. wholesale prices fell by 0.1% in August, while experts had predicted a 0.3% rise.
• Core PPI, which leaves out food and energy costs, also fell by 0.1% against a forecast of 0.3%.
• Equity and bond markets reacted well, as S&P 500 futures climbed and Treasury yields dropped.
• The 10-year Treasury yield slid to 4.068%, and the 2-year yield dropped 1 basis point to 3.529%.
• CME FedWatch now shows traders fully expecting a Fed rate cut in September.

Weaker Wholesale Inflation Supports a Soft Monetary Outlook

U.S. wholesale prices fell by 0.1% last month. The Bureau of Labor Statistics found that this drop did not match economists’ views of a steady rise. The core PPI’s drop shows that price pressures eased when food and energy are not counted. This fact made investors gain hope and push up equity futures, while bond prices did well as yields dropped.

A 0.2% decline in service prices, including a 1.7% drop in trade services, added to the change. Prices in machinery and vehicle wholesaling fell by 3.9%, which suggests prices in these sectors are easing. In contrast, prices for goods edged up a small 0.1%. Energy costs fell by 0.4%, while food prices ticked up 0.1%. Core goods prices, which leave out food and energy, rose by 0.3%. The numbers point to softer price movements in the goods market.

Tariff Effects and Labor Market Dynamics Under Scrutiny

Inflation stays above the Fed’s 2% goal. Fed leaders note softer rises in rents and wages as a sign that they can be patient. Tariffs set in the past still affect some goods; for example, tobacco prices grew by 2.3%. Recent labor data showed close to one million fewer new jobs in the year ending March 2025. Some worry about this drop even as Fed officials call the job figures “solid.” Such points add extra steps to the Fed’s choice on interest rates.

Implications for Upcoming Fed Policy and Market Outlook

This unexpected drop in the PPI makes many investors and analysts believe that the Fed will lower interest rates in September. Market watchers now wait for Thursday’s Consumer Price Index (CPI) report, which may back this view. If consumer inflation shows similar softness, it may push market views toward not just one, but perhaps more rate cuts in the near future.

Soft inflation and mixed signals from the labor market have made equities rise and Treasury yields fall. If current patterns hold, markets may get ready for a looser monetary policy that supports growth.

About the Author

James Hyerczyk is a U.S.-based technical analyst and educator. He brings over 40 years of experience in market analysis and trading. He studies chart patterns and price moves, has written two books, and has worked in both the futures and stock markets.

For more timely updates on market forecasts, economic news, and financial trends, visit FXEmpire.com.

Disclaimer: This article is for educational and informational purposes only and does not mean to serve as investment advice. Readers should check details and speak with a financial advisor before making any investment decisions.

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China Faces Rising Deflation Fears Amid Weak Trade Data as Markets React Positively

China Faces Growing Deflation Risks as Trade Data Slows; Hang Seng Index Shows Gains

By Bob Mason
Updated: September 10, 2025, 02:28 GMT

China’s economy shows signs of deflation. Trade numbers weaken. Consumer demand stays low. The signs point to growth that may slow down. The Hang Seng Index climbs in Hong Kong. This rise brings hope that a new government plan may help.

Key Economic Indicators Signal Deflation Risks

China’s Consumer Price Index dropped 0.4% compared to last year in August. It was expected to drop only 0.2%. Prices did not move from month to month. This fact suggests low buying levels. Unemployment rises. Households spend less. Problems in the real estate field and a slow pickup in credit add to the low spending.

The Producer Price Index fell 2.9% compared to last year in August. In July, the drop was 3.6%. The numbers match expert views. The result shows that factory and wholesale price pressures may ease a bit.

Divergent Consumer and Producer Price Trends

Consumer prices fall to low levels as demand suffers. Factory prices hold their fall to a slower pace. Two trends show different sides of the economy. The manufacturing scene gains some hope as the RatingDog Manufacturing PMI grows. It went from 49.5 in July to 50.5 in August. New order gains hit their fastest rate since March. These changes help stop eight straight months of falling average prices.

Trade Data Paints a Bleaker Picture

Exports grew 4.4% compared to last year in August. This rate slows down from July’s 7.2% jump. The United States saw shipments fall by 33%. Trade challenges push exporters toward tougher price cuts. This change may cause prices to drop further. Tariffs and extra taxes mix into this risk.

Market Response and Policy Outlook

Investors watch the news with hope that new plans come soon. The Hang Seng Index climbs 0.60% to 26,094 early in the day. The Mainland China CSI 300 ticks up by 0.05%. The Shanghai Composite Index falls by 0.02%. Investors set their eyes on data coming on September 15. Retail sales, factory data, and job numbers matter now. The government faces more pressure to use well-targeted fixes. Low spending and unemployment call for clear plans.

Outlook

China shows signs of slow growth. Some parts of the economy recover. Other parts slip into deflation. A government plan may help steady things across the board before the Politburo meets later this month. With a weak world market and low local spending, Beijing’s next steps will be vital in stopping deeper deflation.

About the Author:
Bob Mason works in financial markets over 28 years. He studies currency, commodities, and stocks with a focus on economies in Europe and Asia.

This report uses data available on September 10, 2025. It serves for information and does not give investment advice.

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China’s Economic Ambitions Amidst Deepening US Trade Strain: A Strategic Shift for Global Trade?

China Prepares for Global Economic Shift Amid Deepening US Trade Tensions

Date: September 9, 2025

By Bob Mason

Economic tension grows between the United States and China. Beijing shifts its trade approach. New numbers show US tariffs hitting Chinese exports. This hit puts pressure on growth and trade models.

US Tariffs Slash Chinese Exports

Exports slow in August. Shipment growth sits at 4.4% year-on-year, down from 7.2% in July. Exports to the United States see a 33% drop. US tariffs hit hard. Imports from the US fall 16%. Tariffs under a 90-day trade break add strain. Export levels hit their lowest point since January 2025. Early moves to ship more goods now lose effect. Analysts point to rising trade risks.

Trade Patterns Show Mixed Signals

Trade outside the US paints a complex picture. Exports to ASEAN rise by 9.7% from January to August 2025. EU shipments climb 4.3%. South Korea and Japan also see growth. These gains partly balance the 13.5% drop to the US. Other tariff rules add problems. Vietnam now holds a 40% tariff on goods heading to the US. Indonesian goods face a 19% tax. Rerouting goods becomes harder.

Natixis Asia Pacific’s chief economist Alicia Garcia Herrero sees a tougher period ahead. She says rerouting problems will hit exports in the later months. Beijing plans changes as a response.

Trade Law Reforms and Strategic Shifts

China now studies a trade law change. It would be the first update since 2004. Sources say new rules may bring clearer limits on cross-border services. The rules may also back newer digital and green trade systems. The Vice Commerce Minister points to new land and sea trade links with ASEAN. The goal is to keep supply chains strong amid trade pressures.

Economic Risks and Labor Market Concerns

The drop in export demand may spread inside China. Youth job numbers jump from 14.5% in June to 17.8% in July. Overall, unemployment grows to 5.2%. A weaker job market may slow spending. Economist Mohamed A. El-Erian of Queen’s College in Cambridge says these numbers call for stronger government action in reworking how the economy grows.

Market Reactions and Global Relations

Chinese stock markets cool off from 2025 highs. The CSI 300 and Shanghai Composite fall about 0.7% in September. Yet, they compare well with the Nasdaq Composite year-to-date. A 90-day US-China trade break holds for now. Still, trade gains do not match real progress. Beijing turns to partners like India and Russia. At the recent Shanghai Cooperation Organization summit, leaders such as Russia’s Vladimir Putin and India’s Narendra Modi joined the talks. These moves show that China seeks more global ties amid rising US tensions.

Looking Ahead: Inflation, Retail Sales, and Policy Measures

Soon, investors watch new economic reports. Inflation numbers come on September 9. Retail sales and industrial output reports arrive on September 15. Weak retail and factory numbers, along with deflation risks, may test the 5% GDP target for 2025. Beijing plans focused stimulus to support jobs and spend. Success in these moves and in trade talks will shape China’s path for the end of the year.

China stands at a turning point as it deals with stronger US trade pressure and its own plans for change. The coming months may shape China’s redirect on trade and growth while managing global ties and market risks.

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China’s Export Decline: A Six-Month Low Sparks Market Reactions and Economic Concerns

China’s Exports Drop to Six-Month Low, Falling Short of Forecasts; Impact Seen in Hang Seng Index and Australian Dollar

September 8, 2025 — By Bob Mason

China’s exports slowed in August. Growth touched its weakest pace since January 2025. The numbers did not meet most experts’ numbers. This slower pace sent shocks into nearby markets. The Hang Seng Index in Hong Kong fell, and the Australian dollar felt the strain from ties with China.

Export Slowdown Details

New trade numbers show China’s exports grew 4.4% year-on-year in August. This rate is much slower than July’s 7.2% rise. The 4.4% figure missed most experts’ 5% prediction. This gap stoked fears about lower demand from abroad. Imports also slowed. They rose 1.3%, far below the expected 3% rise and down from a 4.1% increase last month.

The drop comes partly as sellers rushed to ship goods before U.S. tariffs began. The tariffs have changed trade paths. Southeast Asian partners now fill in as supply hubs. In one case, a trade pact in Vietnam brings a 40% tariff on goods in transit. In another, Indonesian goods face a 19% fee when shipped to the U.S.

Broader Economic Indicators and Expert Views

China’s Manufacturing Purchasing Managers Index made a small gain from 49.5 in July to 50.5 in August. The new number shows that production activity barely stayed in neutral territory. New export orders have fallen for five months in a row. These orders show that demand for goods remains low. Meanwhile, new business in services has grown at the fastest rate since May 2024. This growth shows some strength in the service sector.

Alicia Garcia Herrero, Chief Economist for Asia Pacific at Natixis, warned that export growth may shrink further. She said export growth could slow to 2-3% in Q3 2025 and drop to 1% in Q4. She noted that simple goods like furniture, clothing, footwear, and toys can be made in many places. Garcia Herrero mentioned that even bicycles meant for export to America are sold cheaply on Chinese websites, a sign of too many goods available.

Market Reaction

After the trade numbers came out, markets reacted fast. The Hang Seng Index in Hong Kong rose briefly to 25,545 points before falling slightly to 25,435. By the morning of September 8, the index was a bit higher at 25,515 points. Hopes for a U.S.-China trade deal and extra policy help gave some support. In contrast, stocks in Mainland China showed weakness. The CSI 300 dropped by 0.26% and the Shanghai Composite fell by 0.09%.

The Australian dollar (AUD/USD) also reacted. The pair fell from $0.65674 to a low of $0.65546 soon after the numbers came out. The AUD/USD then recovered a bit. By the morning of September 8, it closed near $0.65624. This reaction reflects Australia’s strong trade links with China. About one-third of Australia’s exports and more than half of its trade-to-GDP depend on China. These ties make the currency sensitive when new data appears.

Looking Ahead: Beijing’s Policy Moves and Inflation Data

Market watchers will keep a close eye on Beijing now that the Standing Committee of the National People’s Congress begins its sessions on September 8. Many hope that new steps will be taken to support growth in difficult times.

Key inflation data comes on September 10. The consumer price index and producer price index will show how weak export demand and tougher global competition affect prices. If prices fall, companies may face tighter margins and a change in market mood.

About the Author:
Bob Mason has more than 28 years of experience in the finance world. He has worked with global rating agencies and multinational banks. His work covers currencies, commodities, alternative assets, and global stocks with a focus on European and Asian markets.

For a detailed economic calendar, market forecasts, and trading strategies, visit FXEmpire’s resources.

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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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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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