{"id":122183,"date":"2025-09-05T16:17:08","date_gmt":"2025-09-05T16:17:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/122183\/"},"modified":"2025-09-05T16:17:08","modified_gmt":"2025-09-05T16:17:08","slug":"u-s-labour-market-weakens-with-little-job-growth-and-rising-unemployment","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/122183\/","title":{"rendered":"U.S. labour market weakens with little job growth and rising unemployment"},"content":{"rendered":"

U.S. job growth weakened\u00a0sharply in August while the unemployment rate increased to\u00a0nearly a four-year high of 4.3 per cent, confirming that labour market\u00a0conditions were softening and sealing the case for an interest\u00a0rate cut from the Federal Reserve this month.<\/p>\n

The Labour Department’s closely watched employment report on\u00a0Friday also showed that the economy lost jobs in June for the first\u00a0time in four and a half\u00a0years. Job growth has stalled,\u00a0with economists blaming U.S. President Donald Trump’s sweeping import\u00a0tariffs and an immigration crackdown that has reduced the labour\u00a0pool.<\/p>\n

Softness in the labour market is mostly coming from the\u00a0hiring side. There were more unemployed people than vacancies in\u00a0July for the first time since the COVID-19 pandemic.<\/p>\n

Trump’s duties, which have boosted the nation’s average\u00a0tariff rate to the highest level since 1934, stoked fears of\u00a0higher inflation, prompting the U.S. central bank to pause its\u00a0interest rate cutting cycle. Just as some of the uncertainty\u00a0over trade policy was starting to lift with most tariffs now in\u00a0place, a U.S. appeals court ruled last Friday that many of the\u00a0duties were illegal, keeping businesses in a state of flux.<\/p>\n

“The warning bell that rang in the labour market a month ago\u00a0just got louder,” said Olu Sonola, head of U.S. economic\u00a0research at Fitch Ratings. “The Fed is likely to prioritize\u00a0labour market stability over its inflation mandate, even as\u00a0inflation drifts further from the two\u00a0per cent\u00a0target. It’s hard to argue\u00a0that tariff uncertainty isn’t a key driver of this weakness.”<\/p>\n

The figures come as Canada’s own job figures pointed to trouble in the labour market. August saw the unemployment rate in Canada tick up to 7.1 per cent, and the economy bled 66,000 jobs.<\/p>\n

Non-farm payrolls in the U.S. increased by only 22,000 jobs last month\u00a0after rising by an upwardly revised 79,000 in July, the Labour Department’s Bureau of Labour Statistics said.<\/p>\n

Economists polled by Reuters had forecast payrolls would rise by 75,000 positions\u00a0after a previously reported gain of 73,000 in July. Estimates\u00a0ranged from no jobs added to 144,000 positions created.<\/p>\n

\"aMedical workers are shown at the U.S. Department of Veterans Affairs Boston health-care system campus and medical centre in West Roxbury, Mass., in January 2022. The bulk of the jobs added in the U.S. , according to the new data, were in health care. (Joseph Prezioso\/AFP\/Getty Images)<\/p>\n

Revisions also showed payrolls declined by 13,000 jobs in\u00a0June, the first drop since December 2020, rather than rising by\u00a014,000, as had been reported last month.<\/p>\n

The unemployment rate increased from 4.2 per cent\u00a0in July, in part\u00a0due to more people entering the labour force.<\/p>\n

Some of the sharp job growth slowdown last month could be\u00a0tied to a seasonal quirk. The initial August job count has\u00a0tended to exhibit a weak bias, with revisions subsequently\u00a0showing strength. Nonetheless, employment growth has softened\u00a0considerably, averaging 29,000 jobs per month in the last three\u00a0months, compared with\u00a082,000 during the same period in 2024.<\/p>\n

The bulk of the jobs added in August were in health care,\u00a0with payrolls in the sector rising 31,000. But even this pillar\u00a0of the labour market is showing strain as the increase was below\u00a0the average monthly gain of 42,000 over the last 12 months.<\/p>\n

Employment in the social assistance industry increased by\u00a016,000 positions. Government data this week showed health care\u00a0and social assistance job openings posting back-to-back declines\u00a0in July.<\/p>\n

Federal government payrolls dropped by 15,000, and employment\u00a0in that area is now down 97,000 since January. A sharp decrease\u00a0is expected in October after employees collecting severance pay\u00a0fall off payrolls in the prior month.<\/p>\n

There were job losses in a number of sectors, including\u00a0wholesale trade, manufacturing, construction, and professional\u00a0and business services.\u00a0<\/p>\n

“It’s a little bit of a disappointing job number, but I pretty\u00a0much expect it’s going to revise up,” White House economic\u00a0adviser Kevin Hassett told CNBC after the release of the\u00a0employment report.\u00a0<\/p>\n

Fed chair Jerome Powell last month signalled a rate cut was\u00a0possible at the U.S. central bank’s Sept.\u00a016-17 policy\u00a0meeting, acknowledging the rising labour market risks, but he\u00a0also added that inflation remained a threat. The Fed has kept\u00a0its benchmark overnight interest rate in the range of 4.25 per cent to 4.50 per cent\u00a0since December.<\/p>\n

U.S. Treasury yields fell on the data. The dollar declined\u00a0against a basket of currencies.<\/p>\n

WATCH |\u00a0Trump fires U.S. Bureau of Labour Statistics head after weak jobs report:\"\"<\/p>\n

Trump fires U.S. Bureau of Labour Statistics head after weak jobs report<\/p>\n

U.S. President Donald Trump fired Erika McEntarfer, commissioner of the Bureau of Labor Statistics, after a report showed hiring slowed in July and was much weaker in May and June than previously reported.<\/p>\n

Trump last month fired Erika\u00a0McEntarfer, commissioner of the Bureau of Labour Statistics, accusing her, without evidence, of manipulating the\u00a0employment data. That followed sharp downward revisions to\u00a0payroll counts for May and June.<\/p>\n

But economists have defended McEntarfer and attributed the\u00a0revisions to the “birth-and-death” model, a method the Bureau of Labour Statistics\u00a0uses\u00a0to try to estimate how many jobs were gained or lost because of\u00a0companies opening or closing in a given month.<\/p>\n

“We are in a low-churn labour market, with not a lot of\u00a0hiring or firing happening. So that means the job growth that we\u00a0
do see in the economy is mainly driven by the net birth of new\u00a0firms,” said Ernie Tedeschi, director of economics at the Budget\u00a0Lab at Yale University.<\/p>\n

“But that just happens to be the most imputed part. It’s the\u00a0most sensitive to revision because it’s the result of explicit\u00a0modelling by BLS, rather than something that they can survey.”<\/p>\n

Trump has nominated E.J. Antoni, chief economist at the\u00a0conservative think-tank Heritage Foundation, to replace\u00a0McEntarfer. Antoni, who has penned opinion pieces critical of\u00a0the bureau\u00a0and even suggested suspending the monthly employment\u00a0report, is largely viewed as unqualified by economists across\u00a0political ideologies.<\/p>\n","protected":false},"excerpt":{"rendered":"U.S. job growth weakened\u00a0sharply in August while the unemployment rate increased to\u00a0nearly a four-year high of 4.3 per…\n","protected":false},"author":2,"featured_media":122184,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[45,49,48,124],"class_list":{"0":"post-122183","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-jobs","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-jobs"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/122183","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=122183"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/122183\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/122184"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=122183"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=122183"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=122183"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}