Economy Experiences Significant Deceleration in Job Creation in August

U.S. Labor Market Shows Signs of Slowing, Construction Sector Experiences Job Losses

The U.S. labor market showed signs of a cooling trend in August, as total nonfarm payroll employment experienced little change, with a modest gain of 22,000 jobs. This marked the first negative monthly job growth since January 2010, according to the Employment Situation Summary reported by the Bureau of Labor Statistics (BLS).

The construction sector was not immune to this slowdown, with the industry experiencing a loss of 7,000 jobs in August. Residential construction lost 6,100 jobs, while non-residential construction employment declined by 1,200 jobs.

Despite these losses, the unemployment rate for construction workers remained relatively lower, rising to 3.9% in August, compared to the peak of 15.3% in April 2020. The breakdown of construction employment in August shows that there are currently 954,000 builders and 2.4 million residential specialty trade contractors employed in the sector.

The softening trend in the U.S. labor market is likely to increase pressure on the Federal Reserve to consider an interest rate cut at its upcoming September meeting. Jing Fu, Senior Director of Forecasting and Analysis at the National Association of Home Builders (NAHB), provided additional analysis in the Eye on Housing post.

The latest jobs report also indicates that the slowdown in job growth is not limited to the construction sector. In 2025, monthly job growth has averaged 75,000, a significant slowdown compared to the 168,000 monthly average gain for 2024.

It is worth noting that the June and July figures for the construction sector have been revised downward. June's job growth was revised down by 27,000, from an initial estimate of +14,000 to -13,000. July's job growth was revised up by 6,000, from 73,000 to 79,000.

Combined revisions erased 21,000 jobs from previously reported figures, further indicating a slowdown in job growth in the construction sector. This marks the third consecutive month of job losses in the industry.

The National Economic Council member cited by Jing Fu in his Eye on Housing post for work on the labor market situation in construction in August 2025 is not named explicitly in the provided search results. However, the impact of this slowdown on the construction industry and the broader U.S. economy is a topic of ongoing analysis and discussion among economists and policymakers.

In light of these developments, it is clear that the U.S. labor market is experiencing a cooling trend, with the construction sector being particularly affected. As policymakers and economists continue to monitor and analyze these trends, it remains to be seen how they will respond and what impact their decisions will have on the U.S. economy moving forward.