Finance — Business

U.S. Economy Falters: Job Creation Decreases by 75% Compared to Previous Year

Struggling U.S. labor market: August sees minimal job growth and a job loss in June, as per the Labor Department's report, with only 22,000 jobs added compared to expectations, and a setback to the economy during the earlier stages of pandemic recovery.

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2025 September 15 . 5:28 AM

2 min read

Slowed job growth reveals signs of economic strain in the United States, with job creation... — Slowed job growth reveals signs of economic strain in the United States, with job creation decreasing by 75% compared to the same time last year.

U.S. Economy Falters: Job Creation Decreases by 75% Compared to Previous Year

In a concerning development for the U.S. economy, August saw a mere addition of 22,000 jobs, marking the fourth consecutive month of anemic job growth, according to a report from the Labor Department on Friday.

This weak jobs report comes after President Trump fired the Labor Department official who oversaw the employment data last month. The dismissed official was Lisa Cook, a Fed Governor whom Trump accused of mortgage fraud and dismissed from her position.

The unemployment rate inched up to 4.3% in August, a slight increase from July's rate of 4.2%. This is a stark contrast to the same period last year, where average job growth was down 75% from the same period.

The federal government has shed some 97,000 jobs since the beginning of the year, contributing to the overall job market weakness. Government payrolls are expected to shrink further in the coming months when severance payments to employees who took buyouts end.

The modest increase in health care jobs was partially offset by continued cuts in the federal workforce. Furthermore, there was a net loss of jobs last month in manufacturing, construction, and oil drilling. Weakness in the job market is likely to prompt the Federal Reserve to lower interest rates, as investors widely expect the Fed to cut its benchmark rate by a quarter percentage point.

Julia Coronado, an economist at Macropolicy Perspectives, stated that there are not many silver linings in the report. She also noted that the U.S. is losing engines of job growth, with the unemployment rate rising and more people looking for work than there are job openings for the first time in more than four years.

The revised figures show a net loss of jobs in June for the first time since 2020, in the midst of the pandemic. This weakness was visible all across the economy, casting a dark cloud over the U.S. job market's recovery.

As the U.S. economy continues to grapple with these challenges, it remains to be seen how the job market will fare in the coming months.