The labor market is in trouble, with the unemployment rate in the United States rising to 4.3%.

The employment market performance in August was disappointing. Only 22,000 jobs were added that month, far below the economists' expected 75,000. Data from the Bureau of Labor Statistics shows that the unemployment rate has risen to 4.3%. This weak data, combined with previous sluggish performance, almost guarantees that the Federal Reserve will implement a rate cut this month.

The employment data for July was slightly revised upwards, adding 6,000 jobs to a total of 79,000. However, the situation in June was worse, with the official data for that month revised down by 27,000, resulting in a net loss of 13,000 jobs for that month. This continuous downward revision trend is concerning.

Trump Fires Labor Statistics Bureau Director, Controversy Intensifies

Trump is extremely dissatisfied with this report, especially feeling angry about the constant downward revisions of data over the past few months. He nominated traditional foundation economist EJ Antoni to replace the former director, who had publicly accused the Bureau of Labor Statistics of having “political distortions” in its data. During the waiting period for Senate confirmation, William Wiatrowski is serving as acting commissioner.

Glassdoor Chief Economist Daniel Zhao stated: “The job market has stagnated. The labor market is losing momentum, and the August reports along with downwardly revised data indicate that we are heading towards turbulence, with the soft landing goal still unachieved.”

Recruitment in major industries remains weak. The federal government reduced 15,000 positions, dragging down the overall employment figures. The private sector showed mixed results, with the healthcare sector adding 31,000 positions and the social assistance sector adding 16,000 positions.

However, the manufacturing and wholesale trade sectors have lost 12,000 jobs respectively, which means that factories have laid off workers for four consecutive months.

Fitch Ratings' U.S. Economic Research Director Olu Sonola stated: “The alarm bells sounded a month ago in the labor market are now ringing even louder. The weaker-than-expected employment report almost certainly confirms a 25 basis point rate cut this month. The continuous reduction of jobs in the manufacturing sector for four consecutive months is particularly striking. It is hard to deny that tariff uncertainty is not a key factor contributing to the economic weakness.”

Wage growth is limited. The average hourly wage increased by 0.3% this month, in line with expectations. The annualized wage growth rate is 3.7%, slightly lower than the expected 3.8%, indicating that the pressure for wage growth is not severe.

Unemployment rate rises, Fed interest rate cut imminent

The Federal Reserve will hold a meeting on September 17, and the market generally expects the benchmark interest rate to be lowered by 25 basis points. Powell and his team are also facing pressure from Trump, who has expressed interest in assuming the position of Federal Reserve Chairman.

Inflation concerns have also arisen. The Federal Reserve is worried that Trump's tariff measures may once again push prices higher. Recent data shows that inflation is rising slowly but steadily, which presents a dilemma for the Federal Reserve: on one hand, there is a slowdown in job growth, and on the other hand, there are inflation risks.

There is one somewhat positive piece of data: household surveys show that employment increased by 288,000 people. However, this is not all good news, as the number of unemployed people also increased by 148,000, and the labor force grew by 436,000, leading to a rise in the unemployment rate. The labor participation rate slightly rose to 62.3%.

The broad unemployment rate (which includes those who have given up searching for jobs or those who want full-time work but can only find part-time) has risen to 8.1%, the highest level since October 2021, having increased by 0.2 percentage points just this month.

The work of the Labor Statistics Bureau is not yet complete. They are expected to release preliminary estimates for the annual benchmark revisions starting from March of this year. These adjustments have sparked controversy in recent years, especially after the pandemic. The response rate to surveys has significantly declined, with fewer and fewer businesses and institutions filling out questionnaires.

The Labor Statistics Bureau usually releases initial data based on early surveys, and then makes two revisions as more information is obtained. However, Trump accused the agency of political bias, which is also the reason he fired the former director and appointed Anthony, who, like his predecessor, is skeptical of the official data.