Friday, September 5, 2025
This morning, we finish off “Jobs Week” with the Big Kahuna: the Employment Situation report from the U.S. Bureau of Labor Statistics (BLS). August saw another weak month: +22K nonfarm payroll totals was below the +75K anticipated and upwardly revised +79K reported the previous month. The Unemployment Rate ticks up to +4.3%, the highest level since October 2021.
The private sector was responsible for +38K new jobs filled last month. That’s still not great, but the headline subtracts another pullback in federal government employment, which is now down -88K since the start of the year. Hourly Wages came in as expected at +0.3%, in-line with the prior month. Year over year, wage growth has ticked down to +3.7%, again the lowest level since 2021.
Also, although July’s total for BLS jobs increased by +6K on this morning’s revision, June’s headline number is a different story: it’s been downwardly revised again, -27K and swinging to a loss of -13K — the first negative monthly BLS headline number since December 2020, when the nation was still in the throes of the Covid pandemic. You may recall the June 2025 BLS headline was originally reported at +147K.
Labor Force Participation remained weak as well: 62.3%, equalling where we were in June. The Average Workweek, at 34.2 hours, was the second-lowest of the year. The U-6 (aka "real unemployment") ramped up to its highest level in four years to +8.1%. By sector, Education and Healthcare came in at +46K, followed by +28K in Leisure and Hospitality. Professional and Business Services came in negative, -17K, while Manufacturing shed -12K jobs last month.
All this said, August tends to be a weak month, comparatively, for jobs growth. The low month for all of 2024 was in August, albeit at +71K — more than 3x today’s number. Of course, these numbers are subject to revisions in future months as the surveys fill out more completely.
Pre-market futures are moving up on the news. The Dow went from -138 points directly prior to the BLS release to +22 now. The S&P 500 was +2 points, now +29. The Nasdaq moved up from +101 points ahead of the report to +226 points. The small-cap Russell 2000 is +10 points up from yesterday’s close. Bond yields are slipping, as well: to +4.10% on the 10-year and +3.52% on the 2-year.
The reason for this is elementary: the odds for a Fed rate cut at its September 16-17 meeting just shot up to +100%. Nuveen’s Saira Malik on CNBC this morning immediately mentioned that a 50-basis point (bps) rate cut is now on the table for the September meeting. Perhaps she’s early to the party, but what we do see are odds getting better for an October cut and another one in December. If we shed 75 bps by the end of the year, we’ll be under 4% for the first time in three years.
Weekly Jobless Claims notwithstanding, it’s clear we are seeing a slowdown in the U.S. labor market. Even Fed Chair Jerome Powell — not one to be rushed into cutting rates, as we all know — cited weaker jobs numbers at the Jackson Hole summit late last month, signaling rate cuts are coming, even as inflation metrics tick back up toward +3%.
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BLS Jobs for August: +22K, Unemployment +4.3%
Friday, September 5, 2025
This morning, we finish off “Jobs Week” with the Big Kahuna: the Employment Situation report from the U.S. Bureau of Labor Statistics (BLS). August saw another weak month: +22K nonfarm payroll totals was below the +75K anticipated and upwardly revised +79K reported the previous month. The Unemployment Rate ticks up to +4.3%, the highest level since October 2021.
The private sector was responsible for +38K new jobs filled last month. That’s still not great, but the headline subtracts another pullback in federal government employment, which is now down -88K since the start of the year. Hourly Wages came in as expected at +0.3%, in-line with the prior month. Year over year, wage growth has ticked down to +3.7%, again the lowest level since 2021.
Also, although July’s total for BLS jobs increased by +6K on this morning’s revision, June’s headline number is a different story: it’s been downwardly revised again, -27K and swinging to a loss of -13K — the first negative monthly BLS headline number since December 2020, when the nation was still in the throes of the Covid pandemic. You may recall the June 2025 BLS headline was originally reported at +147K.
Labor Force Participation remained weak as well: 62.3%, equalling where we were in June. The Average Workweek, at 34.2 hours, was the second-lowest of the year. The U-6 (aka "real unemployment") ramped up to its highest level in four years to +8.1%. By sector, Education and Healthcare came in at +46K, followed by +28K in Leisure and Hospitality. Professional and Business Services came in negative, -17K, while Manufacturing shed -12K jobs last month.
All this said, August tends to be a weak month, comparatively, for jobs growth. The low month for all of 2024 was in August, albeit at +71K — more than 3x today’s number. Of course, these numbers are subject to revisions in future months as the surveys fill out more completely.
Pre-market futures are moving up on the news. The Dow went from -138 points directly prior to the BLS release to +22 now. The S&P 500 was +2 points, now +29. The Nasdaq moved up from +101 points ahead of the report to +226 points. The small-cap Russell 2000 is +10 points up from yesterday’s close. Bond yields are slipping, as well: to +4.10% on the 10-year and +3.52% on the 2-year.
The reason for this is elementary: the odds for a Fed rate cut at its September 16-17 meeting just shot up to +100%. Nuveen’s Saira Malik on CNBC this morning immediately mentioned that a 50-basis point (bps) rate cut is now on the table for the September meeting. Perhaps she’s early to the party, but what we do see are odds getting better for an October cut and another one in December. If we shed 75 bps by the end of the year, we’ll be under 4% for the first time in three years.
Weekly Jobless Claims notwithstanding, it’s clear we are seeing a slowdown in the U.S. labor market. Even Fed Chair Jerome Powell — not one to be rushed into cutting rates, as we all know — cited weaker jobs numbers at the Jackson Hole summit late last month, signaling rate cuts are coming, even as inflation metrics tick back up toward +3%.
Questions or comments about this article and/or author? Click here>>