August’s labor market showed clear signs of softening, with the unemployment rate rising to 4.3%—its highest level in nearly four years. Private payroll gains also missed expectations: ADP’s report revealed only 54,000 new jobs, well below the forecasted 68,000 and down sharply from July’s revised 106,000.
This unexpected slowdown triggered a quick sell-off on Wall Street. All three major US stock indexes closed lower, while the dollar index and Treasury yields retreated. In a classic flight to safety, gold futures climbed as investors weighed the outlook.
Data from the CME FedWatch tool shows that traders are now pricing in at least a 25 basis-point rate cut at the Federal Reserve’s September meeting, with some even anticipating a half-point move. Prediction platform Kalshi shares that view, predicting at least a quarter-point cut.
Bank of America analysts say these numbers could shift the Fed’s focus from inflation toward labor market health. They forecast quarter-point cuts in September and December, cautioning that a deeper slowdown might prompt more aggressive easing in October or larger rate cuts in 2026.
The political fallout is already taking shape. Representative Don Beyer of Virginia pointed to the data on social media, arguing that rising prices and joblessness reflect flawed tariff policies. “Inflation is heating up, prices and unemployment are both rising and job growth is weakening sharply,” he wrote. “All thanks to Trump’s tariffs.”
For young professionals, entrepreneurs, and global citizens tracking economic trends, the takeaway is clear: a cooling job market could prompt faster rate relief—but it also raises fresh questions about growth momentum. As we look ahead to September, the Fed’s next move may well shape the trajectory of the world’s largest economy.
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U.S. job market weakens, analysts see Fed rate cut likely in September
cgtn.com
