US employers likely added a modest 80,000 jobs last month, a sign that the labor market has cooled
Sep 4, 2025, 2:04 PM | Updated: Sep 5, 2025, 1:52 am
WASHINGTON (AP) — When the Labor Department put out a disappointing jobs report a month ago, an enraged President Donald Trump responded by firing the economist in charge of compiling the numbers and nominating a loyalist to replace her.
Nothing quite so dramatic is likely Friday when the department releases hiring and unemployment numbers for August. They are expected to show that companies, government agencies and nonprofits added a modest 80,000 jobs last month, according to a survey of forecasters by the data firm FactSet.
That would be a slight improvement on July’s 73,000 but still offer more evidence that the American job market has cooled significantly from last year.
The unemployment rate is forecast to stay at a low 4.2% — suggesting that employers are stuck in a no-hire, no-fire mode: They are reluctant to add many new workers but don’t want to give up the ones they have. But there are signs they may be starting to cut staff.
The U.S. job market has lost momentum this year, partly because of the lingering effects of 11 interest rate hikes by the inflation fighters at the Federal Reserve in 2022 and 2023 and partly because President Donald Trump’s policies, including his trade wars, have created uncertainty that leaves managers reluctant to make hiring decisions.
So far in 2025, the economy has generated 85,000 new jobs a month, down from 168,000 last year and an average 400,000 a month during the hiring boom of 2021-2023 as the United States roared back from COVID-19 lockdowns.
“The labor market is showing signs of cracking,” said Heather Long, chief economist at Navy Federal Credit Union. “It’s not a red siren alarm yet, but the signs keep growing that businesses are starting to cut workers.’’
The Labor Department reported Thursday that the number of Americans applying for unemployment benefits — a proxy for layoffs — rose last week to the highest level since June, though the number of claims remained within a healthy range.
The outplacement firm Challenger, Gray & Christmas said Wednesday that U.S.-based employers have announced more than 892,000 jobs cuts this year through August, more than the 761,000 reported for all 12 months of 2024.
In a sign that U.S. hiring gains are limited and fragile, nearly 80% of new private sectors jobs this year have been created in just one industry: healthcare and social assistance, a Labor Department category that spans hospitals to daycare centers.
After seeing the weak July jobs numbers, Trump fired Erika McEntarfer, head of the Bureau of Labor Statistics, baselessly claiming the hiring report had been rigged to hurt him politically.
He has nominated a partisan idealogue, E.J. Antoni, to replace her. But for now, pending Antoni’s confirmation by the Senate, the jobs report is in the hands of the acting BLS commissioner, William Wiatrowski, a career Labor Department official.
Economists and others familiar with how the jobs numbers are collected have expressed confidence that Labor Department procedures will keep the data are safe from political interference.
What set Trump off a month ago wasn’t the July hiring or unemployment figures. It was BLS revisions, which shaved a stunning 258,000 jobs off May and June payrolls and slashed average monthly hiring from May through July to a mere 35,000.
The revisions are standard practice, and necessary because many companies surveyed by the government submit their responses late or correct what they’ve already sent in.
Government economists are also contending with a big drop in the share of companies that respond to the surveys. A decade ago, about 60% of companies surveyed responded. Now only about 40% do.
And it’s an international problem for data collectors, especially since COVID-19. The United Kingdom even suspended publication of an official unemployment rate because of inadequate responses.
“I remember being at an international conference where the chief statistician of the Russian Republic was complaining about how the Russians don’t want to complete their surveys,” William Beach, BLS commissioner from 2019 to 2023, said in an interview last month. “What could he do? If you can’t compel completion in Russia, you can’t compel it anywhere.’’
