By Jake Conley

US labor market continues its dramatic slowdown. Yahoo finance

The US labor market continued its dramatic summer slowdown in August.

The August jobs report released Friday by the Bureau of Labor Statistics (BLS) showed there were just 22,000 new jobs added to the economy last month, far fewer than forecast and the latest sign that the US labor market has cooled in recent months. The unemployment rate rose to 4.3% last month.

Economists had expected the report to show 75,000 jobs were created in August with the unemployment rate forecast to rise to 4.3%, according to data from Bloomberg.

In July, the economy created 73,000 new jobs, but those figures were revised on Friday to show there were 79,000 jobs created during the month. Revisions to June's data, however, were more negative with those numbers now showing there were 13,000 jobs lost during the month, the first outright monthly decline since 2020. Revisions in early August had brought June's job growth down to 14,000.

These revised figures now suggest that over the last three months, the US economy has created fewer than 30,000 new jobs, on average. After the July jobs report showed there were 258,000 fewer jobs created in May and June than previously estimated, President Trump fired the head of the BLS.

Average hourly earnings rose 0.3% over last month and 3.7% over the prior year in August; Wall Street expected hourly earnings to have increased 0.3% over the prior month, and 3.7% over last year.

"August’s Employment Report confirmed that the labor market has headed off a cliff-edge," wrote Bradley Saunders, North America economist at Capital Economics, in a report on Friday.

Friday's report comes after data out Thursday from private payroll provider ADP showed there were 54,000 private sector jobs created last month, while data from the Labor Department showed initial filings for unemployment insurance tallied 237,000 last week, the most since June.

By industry, Friday's report showed education and health services was the largest job creator, adding 46,000 employees during the month. Losses were sharpest in the durable goods and business services industries, where 19,000 and 17,000 jobs were lost in August, respectively.

There were 16,000 jobs lost from the government sector in August.

Construction workers work on the exterior of a housing development in Los Angeles on Aug. 28, 2025. (FREDERIC J. BROWN/AFP via Getty Images)