Lead: In August 2025 the US economy added just 22,000 payroll jobs and the unemployment rate rose to 4.3%, a sign that hiring has cooled nationwide and that economic growth is slowing.
Key Takeaways
- Employers added 22,000 jobs in August; unemployment increased to 4.3%.
- Goods-producing sectors lost 25,000 jobs, with manufacturing and construction hit hardest.
- Healthcare and social assistance led gains (+48,000); leisure and hospitality rose by 28,000.
- Average hourly earnings were up 3.7% year-over-year.
- Previous months were revised: June down by 13,000; July revised up to 79,000.
- Private ADP payrolls showed about 54,000 jobs added in August; initial unemployment claims rose to 237,000.
- Market reaction priced in likely Federal Reserve rate cuts; major US indexes rose in early trading.
Verified Facts
The Bureau of Labor Statistics reported a net gain of 22,000 nonfarm payroll jobs in August 2025 and an unemployment rate of 4.3%, the highest reading since October 2021. The report included routine statistical revisions: June was revised down by 13,000 jobs, while July was revised up to 79,000 jobs from an earlier estimate of 73,000.
Sectors diverged sharply. Goods-producing industries (which include manufacturing and construction) lost 25,000 jobs. By contrast, healthcare and social assistance added 48,000 jobs and leisure and hospitality added 28,000. Government payrolls declined by about 16,000.
Complementary data released this week underlined the softer labour market: the ADP National Employment Report estimated private payrolls rose by roughly 54,000 in August, and weekly initial unemployment claims increased by 8,000 to 237,000. Separately, the number of job openings fell to its lowest level since September 2024, producing the first reading since the pandemic in which unemployed people outnumber openings.
Context & Impact
Financial markets interpreted the weak jobs print as increasing the likelihood of Federal Reserve policy easing. Lower interest rates tend to boost equity valuations by reducing corporate borrowing costs; early trading showed the S&P 500, Dow Jones and Nasdaq all advancing.
On policy and politics, reactions split along partisan and stakeholder lines. White House officials highlighted cumulative private-sector job gains since the administration began, while critics said the data reflect damage from tariffs, immigration restrictions and fiscal choices. Manufacturing groups called for rate relief and clearer trade policy to restore business confidence.
- Fed outlook: Investors now price a higher probability of a 25 basis point cut at the September Fed meeting.
- Business investment: Manufacturers cite higher input costs and trade uncertainty as constraints on hiring.
Official Statements
The White House pointed to nearly 500,000 private-sector jobs created during the administration and urged the Fed to lower rates to support further growth.
White House Press Secretary
Trade and manufacturing groups urged interest-rate relief and concluded trade actions to give firms the certainty needed to hire and invest.
Alliance for American Manufacturing
Unconfirmed
- Claims that all recent private-sector job gains went exclusively to American-born workers are an administration assertion and are not directly verified in this report.
- Some political commentary links the slowdown solely to specific tariff or immigration actions; while those factors are cited by analysts, isolating their exact contribution requires further study.
Bottom Line
August’s payroll report confirms that US hiring has cooled meaningfully, with sectoral losses concentrated in goods-producing industries while services-related areas still added jobs. The immediate market implication is greater odds of Federal Reserve rate cuts this autumn; the broader economic picture will depend on whether hiring stabilizes, wage trends hold, and policy uncertainty is resolved.