Bloomberg News
WASHINGTON — The Bureau of Labor Statistics reported that the economy added 22,000 jobs in August, an anemic growth rate that could pave the way for the Federal Reserve to lower interest rates during their next meeting later this month.
BLS reported that the unemployment rate ticked up slightly to 4.3%, while the number of new entrants to the labor market — those who are unemployed and have never had a job before — decreased by nearly 200,000, offsetting a similarly-sized increase in July. The number of long-term unemployed remained unchanged in August but has increased by 385,000 since the beginning of the year, the bureau said.
The report’s findings mark the latest in a string of lackluster employment figures in recent months. The bureau found that the economy added 73,000 jobs in July and revised its May and June employment estimates downward by 258,000 jobs, a move that spurred President Trump to fire BLS director Erika McEntarfer, who Trump said without evidence had “rigged” the jobs numbers to embarrass his administration.
Payroll firm ADP reported earlier in the week that private companies had added only 54,000 jobs in August, in line with the June and July employment statistics but a marked decline from the first few months of the year, when the economy was adding more than 100,000 jobs per month.
The data is the most recent indicator that the economy is beginning to cool, potentially teeing up an interest rate cut by the Federal Reserve when the Federal Open Market Committee meets on Sept, 16 and 17.
Members of the FOMC, including Federal Reserve Gov. Christopher Waller and Fed Vice Chair for Supervision Michelle Bowman, have signaled that there is a pressing need to cut interest rates because of a softening labor market. In a recent speech, Waller urged the FOMC to “get on with it” by slashing interest rates 25 basis points, adding that the labor market may be in a tougher spot than originally thought.
Administration critics pounced on the report’s findings as evidence of the economic damage being caused by President Trump’s economic policies. Reacting to the jobs report, Senator Elizabeth Warren, D-Mass., said she has “long been calling for the Fed to cut interest rates” but that the “chaos” of Trump’s policies makes it imperative that the central bank lower interest rates.
“There are now more unemployed people than job openings in the United States for the first time since the pandemic, Trump’s immigration policies are shrinking the workforce, and his chaotic tariffs are slowing down hiring,” Warren wrote in a statement Friday. “If Trump won’t reverse his harmful policies, the Fed should act to protect American jobs.”
