U.S. Job Growth Slows in August

NEW YORK (Reuters) – The pace of U.S. job growth slowed more than expected in August, and the unemployment rate increased, indicating signs of a slowing labor market and heightening expectations for the Federal Reserve to cut interest rates more aggressively.

Nonfarm payrolls increased by 22,000 jobs in August, following an upward revision to 79,000 in June, according to Labor Department data released on Friday. Economists surveyed by Reuters had anticipated an addition of 75,000 jobs last month.

The unemployment rate rose to 4.3% in August from 4.2% in the previous month.

Market Reaction

• Stocks: S&P E-minis saw a slight increase, up 0.15%.
• Bonds: Treasury yields decreased, with the benchmark U.S. 10-year note yield down 7.7 basis points at 4.099%, and the two-year note yield down 8.7 basis points at 3.505%.
• Forex: The dollar index weakened further, down 0.53% to 97.71.

Comments

Brian Jacobsen, Chief Economist, Annex Wealth Management:
“A 50 basis point cut is back on the table. There’s been nearly net zero job creation with broad declines across industries. The economy needs better breadth to reduce anxiety.”

Peter Cardillo, Chief Market Economist, Spartan Capital Securities:
“The labor market shows signs of stalling, potentially leading to negative job growth due to hiring uncertainties over tariffs. This could spur a Fed rate cut of 50 basis points in September.”

David Rees, Head of Global Economics, Schroders:
“The slump in U.S. employment growth clears the way for imminent Fed rate cuts. However, other labor market measures have held, and hiring may rebound soon. Monetary and fiscal stimulus might lead to inflation rather than growth next year.”