The news: August job gains fell well short of expectations, with just 22,000 new positions versus the 75,000 economists surveyed by Dow Jones had forecast. That pushed the unemployment rate up to 4.3%, according to the US Bureau of Labor Statistics.

• Revisions added 6,000 jobs to July but cut June’s total by 27,000, leaving the three-month average at a tepid 29,000.
• The overall unemployment rate rose to 4.3%, while Black unemployment climbed to 7.5%—the highest since October 2021 and, excluding the pandemic era, the worst in nearly eight years.

The weak report deepens the sense of strain in the US labor market.

• In August, companies announced plans to create just 1,494 jobs—the fewest for the month in records back to 2009—while job cuts surged to their highest since 2020 amid economic uncertainty, per Challenger, Gray & Christmas.
• Initial jobless claims also rose by 8,000 to 237,000 in the week ended August 30, the highest since June and above Bloomberg’s forecast of 230,000.
• Job openings fell in July to a 10-month low, and for the first time since 2021, there was fewer than one vacancy per unemployed worker, according to the BLS.

Why it matters: A weakening labor market adds to the headwinds already straining the economy.

• Inflation is climbing. Core PCE inflation, which strips out food and energy, rose 2.9% in July—the highest since February—as tariffs filter through to consumers.
• Tariffs are squeezing businesses. The Fed’s Beige Book is filled with warnings, even from firms hit only indirectly. In the Richmond, Virginia, district, a printer manufacturer that doesn’t import goods still faced supplier price hikes of 5%–15% due to tariffs.
• Economic activity is stagnating. The August Beige Book said growth showed “little or no change” across most regions as rising prices strain household budgets.
• Consumers are gloomy. Sentiment in August fell at least 10% YoY and versus six and 12 months prior, per the University of Michigan. The drop cut across age, income, and wealth groups, with views on finances, business conditions, and jobs all deteriorating.

Our first take: The US economy looks wobbly as we head into the crucial end of the year. A soft job market and rising prices are giving off bad vibes that are unlikely to fade before the holidays. That means consumers are likely to keep their wallets tighter. We expect retail sales in November and December to grow just 1.2%—even weaker than the already modest 1.5% pace we expect for 2025 overall.

This is our immediate perspective. We’re actively developing this story throughout the day with more research and data from the EMARKETER database. Our in-depth analysis will be included in our client-only Briefings. Non-clients can click here to get a demo of our full platform and coverage.

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