The latest data on the US employment released on Friday from the Bureau of Labor Statistics feeds the fears that the labor market can be about to enter a significant slowdown phase. Vision that consolidates operators’ bets on a cut of the interest rates of the Federal Reserve in the meeting of 16-17 September, as announced by President Jerome Powell in a speech last month during the annual symposium of the Central Bank at Jackson Hole.
The numbers of the Job Report
The non -agricultural paychecks increased only by 22,000 units in August 2025, according to the report of the Bureau of Labor Statistics, after 79 thousand paychecks were created in July (a revised 73,000 data). The data is also worse than the expectations of the market which indicated an increase of 75 thousand jobs. The average hourly salaries stood at 36.53 dollars, recording an increase of 0.3% on month and 3.7% on year (in line with expected) after +0.3% monthly and +3.9% trend registered in July. In addition, the unemployment rate risen to 4.3%, compared to 4.2% of the previous month.
A general picture non -comforting
Today’s numbers are the icing on the cake of a non -comforting general picture that integrates with data on vacancies, beige books and ADPs, released in recent days.
The U.S. Labor Department published on Wednesday the report on job openings (JOLTS), which emerged that vacant places fell by 176 thousand units in July, reaching 7.18 million, well below the expectations that indicated an increase to 7.38 million. It is the minimum of the last twelve months (September 2024). Only in the last two months, the job offers have decreased by over 300,000 units, confirming the fulfillment recorded during the summer.
Even the beige book of the FED has confirmed a slowdown in the labor market, indicating that seven districts have noted that companies are reluctant to hire workers due to the weakest demand or uncertainty (on duties). Despite this, eleven districts have reported a “minimum or nothing net variation” of the overall employment levels, while a district spoke of “a modest drop” of the number of employed. Most districts have mentioned an increase in the number of people looking for work. However, half of the districts observed a reduction in the availability of immigrant labor with impacts especially on the construction sector.
Furthermore, the ADP report on employment in the private sector, which precedes the official data of the Department of Labor by one day, highlights that the employees of the private sector recorded an increase of 54 thousand jobs, after 104 thousand of the previous month, resulting lower than the expectations of analysts who indicated an increase of 73 thousand units.
Waiting for the Fed
Overall, therefore, the numbers show that the increase in employment has undergone a substantial slowdown in recent months, the vacant positions have decreased and the wage increases have attenuated, all factors that are weighing on economic activity in general.
In this context, the cutting of September interest rates by the Federal Reserve seems almost obvious.
Last month, during the annual symposium of the Central Bank in Jackson Hole, the president of the Fed Jerome Powell had reported a possible cut of the rates during the monetary policy meeting of the US Central Bank of 16 September, recognizing the growing risks for the labor market, but also adding that inflation remains a threat. It should be remembered that the Fed has maintained its reference rate in the reference in the interval 4.25% -4.50% from December.
Christian Hantel’s comment, Vontobel’s Portfolio Manager: “The expected data for August was 75,000 new jobs, but only 22,000 were created-an alarm signal for the labor market. This weak figure increases the probability that the Fed cuts the rates already this month. The Non-Farm Payrolls figure confirms an increasing weakening of the labor market in the United States, in line with the last, also surprisingly weak, with only 73,000 new jobs created. US, who remains solid “. And he concludes, “overall, the weakest data on employment have contributed to feeding the recent rally of the bond markets and will be a key element for the FOMC decision in the September meeting. Now the attention of the markets will move to the inflation data (CPI) coming out next Thursday, which will provide further indications on what to expect from the FED meeting of the following week”.
