August jobs report disappoints, but offers hope for interest rate cut

What slow August job growth says for interest rates

The U.S. Bureau of Labor Statistics reported 22,000 jobs were added in August 2025, a large distance away from the number of jobs that were expected for the month. FOX 26 Business Report Tom Zizka spoke to an expert about what led up to the slow growth and what could happen now.

HOUSTON - Tariffs, artificial intelligence, and general uncertainty are being blamed for a dismal August jobs report. The Labor Department reports just 22,000 new jobs were created, well below the expected 75,000. Additionally, June's job numbers were revised down to show a loss of 13,000 jobs. That's the first negative month since December 2020, during the pandemic.

Among the report's numbers, healthcare along with 'leisure and hospitality' jobs saw gains that were still below historical averages. Public-sector, professional and business services, manufacturing, and construction jobs all saw monthly losses.

The unemployment rate ticked up to 4.3% indicating while employers are not hiring, they are not laying workers off.

The report sets the stage for the Federal Reserve to likely cut interest rates when it meets in mid September. Observers expect a quarter-point cut.

What they're saying:

"When you layer all these layers of a cake on top of each other, it turns into a disastrous economy from an employment standpoint," says Dallas executive recruiter David Cathey. "You stack tariff issues that have happened, which cause trade issues; you stack artificial intelligence, and this new wave that's coming in; and then you stack people that, right now, the average time to get a job is 2.5 months of being unemployed before you can get a job."