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U.S. job growth nearly came to a halt in August, with the economy adding just 22,000 jobs, far short of expectations, the Bureau of Labor Statistics reported Friday. The weak reading, coupled with an uptick in unemployment to 4.3%, is fueling concerns that President Donald Trump’s economic policies are pushing the country toward stagnation.
Revisions to earlier months deepened the unease: June’s figures were adjusted to show a net loss of jobs, while July’s numbers edged slightly higher. Overall, the economy has added 598,000 jobs so far in 2025, compared with more than 1.1 million in the same period last year.
“The jobs engine that has been integral to U.S. economic growth defying expectations for the past four years is stalling,” said Sarah House, senior economist at Wells Fargo. “Weakness remains widespread across industries, making it difficult to drive a bounce-back in the near term.”
Rising unemployment and inflation fears
More than a quarter of unemployed Americans have been out of work for six months or longer — the highest rate since 2016 outside of the pandemic. Economists warn the mix of slowing growth and persistent inflation could deepen economic headwinds heading into the fall.
Major stock indexes turned negative after initially hitting record highs Friday morning, reflecting growing investor concerns. Markets are now betting the Federal Reserve will face increased pressure to cut interest rates at its meeting later this month, despite lingering inflation risks tied to Trump’s tariffs.
Trump, who has repeatedly criticized Fed Chair Jerome Powell, renewed his attacks Friday. “Jerome ‘Too Late’ Powell should have lowered rates long ago,” the president wrote on social media.
Tariffs and spending cuts blamed
While the economy remained resilient through the Biden administration, growth began slowing late last year. Trump’s push for aggressive import tariffs and sweeping cuts to federal spending — many still tied up in court battles — has created uncertainty that businesses say is making it harder to hire.
“Manufacturing will be treading water until we see changes on tariffs and trade deals,” Scott Paul, president of the Alliance for American Manufacturing, said in a statement.
Politicizing the jobs report?
Friday’s data was the first since Trump fired BLS Commissioner Erika McEntarfer last month, accusing her of releasing “inaccurate” reports. Economists largely dismissed the charge, warning instead that the firing risked undermining the independence of a historically nonpartisan agency.
Trump’s nominee to replace her, E.J. Antoni of the Heritage Foundation, has already drawn criticism for suggesting the U.S. pause publication of monthly jobs reports, a move experts warn could rattle global markets. Antoni is awaiting Senate confirmation.
Weak signals across the labor market
Other indicators had already hinted at slowing momentum:
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Job openings fell in July to a 10-month low.
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Private payrolls grew by just 54,000 jobs in August, ADP reported.
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Employers announced plans to add just 1,494 jobs last month, the lowest August total since records began in 2009, according to Challenger, Grey & Christmas.
Meanwhile, layoffs surged 39% from July, with companies citing both Trump’s tariffs and weaker consumer spending as drivers of cost-cutting.
“The job market for U.S.-born workers is worse so far in 2025 than it was in preceding years,” said Ben Zipperer, senior economist at the Economic Policy Institute, countering Trump administration claims that immigration restrictions are boosting opportunities.
Outlook
Economists say September’s seasonal hiring plans, especially from retailers ahead of the holiday season, will be critical in determining whether the slowdown deepens. But with uncertainty mounting over tariffs, inflation, and interest rates, confidence in the labor market is wavering.
