WASHINGTON: The US unemployment rate increased to 4.3% in August, marking the highest level in nearly four years. The rise signals a weakening labor market and strengthens expectations for a Federal Reserve interest rate cut later this month.
According to the Labor Department, nonfarm payrolls grew by only 22,000 in August, compared to 79,000 in July. Economists had forecast stronger gains, but revisions also revealed job losses in June, the first decline in more than four years.
The report shows that job growth has been slowing since April. Analysts point to tariffs, spending cuts, and declining business confidence as key reasons. Sectors such as manufacturing, construction, and professional services continued to shed jobs, while healthcare and social assistance saw modest increases.
The US unemployment rate has now climbed from 4.2% in July to 4.3% in August. Economists note that more people entered the labor force, but job creation did not keep pace. The average duration of joblessness also rose to its highest since 2022.
Despite the weak employment data, wages offered some relief. Average hourly earnings increased by 0.3% in August, providing slight support to household incomes. However, shorter work hours raised new concerns about overall economic growth.
Financial markets widely expect the Federal Reserve to cut interest rates at its September meeting. Investors anticipate further cuts later this year as the central bank tries to ease pressure on businesses and workers.
The rising US unemployment rate highlights challenges for policymakers, who are balancing inflation concerns with slowing growth. Economists warn that if hiring does not recover, the risk of a recession could increase in the coming months.
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