U.S. job growth slowed in August, fueling concerns about a sharp slowdown unfolding in the labor market.

According to the Bureau of Labor Statistics, the economy created 22,000 new jobs in August, from an upwardly revised 79,000 in the previous month.

The unemployment rate ticked up to 4.3 percent from 4.2 percent in July.

Median estimates from FactSet Insights had projected 80,000 new jobs and a jobless rate of 4.2 percent.

Average hourly earnings rose by 0.3 percent, unchanged from the previous month. On a year-over-year basis, the increase in average hourly earnings slowed to 3.7 percent from 3.9 percent.

Health care and social assistance, which have accounted for a sizable share of this year’s employment gains, added 31,000 and 16,000 jobs, respectively.

Federal government employment continued its downward trend, falling by 15,000 last month. So far this year, federal payrolls have fallen by 97,000. However, the bureau cautioned that the numbers could be higher than what is currently being reported.

“Employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey,” the report stated.

Wholesale trade and manufacturing employment each declined by 12,000.

“Today’s report evidences further softening in the jobs market,” Ed Maguire, senior managing director at Freedom Capital Markets, said in a note emailed to The Epoch Times.

But while tariff and artificial intelligence uncertainty persist, “the impact of recent tax law changes encouraging investment does appear to bolster underlying resilience in the U.S. economy,” Maguire added.

“Net-net we appear in Goldilocks territory, with enough underlying strength to offset tepid jobs data.”

Revisions, meanwhile, have been a key component of the monthly jobs reports.

The change in total employment for June was revised lower again, indicating the economy lost 13,000 jobs. Conversely, July’s reading was adjusted higher by 6,000, to 79,000.

In July, the bureau reported that May and June figures were adjusted lower by a combined 258,000, which prompted President Donald Trump to terminate commissioner Erika McEntarfer. He later nominated Heritage Foundation chief economist E.J. Antoni for the position.

Deteriorating data quality has been a critical issue for the federal agency in recent years, with lower monthly survey response rates playing a factor.

Meanwhile, in the household survey data portion of the nonfarm payrolls report, the number of employed full-time workers declined by 357,000. Part-time workers surged by 597,000.

The number of new entrants in the labor force—unemployed individuals who are searching for their first job—declined by 199,000 to 786,000.

The number of individuals classified as being jobless for 27 weeks or more—the long-term unemployed—was little changed at 1.9 million.

The labor force participation rate was flat at 62.3 percent, while the employment-population ratio was unchanged at 59.6 percent. Average weekly hours were unchanged at 34.2.

Individuals working two more jobs increased by more than 400,000 to 8.785 million.

Market Reaction

A worse-than-expected August jobs report intensified bets that the Federal Reserve will cut interest rates later this month.

U.S. stocks were mixed following the employment data. The tech-heavy Nasdaq Composite Index rose by almost 0.7 percent, while the blue-chip Dow Jones Industrial Average slipped by about 0.1 percent.

The U.S. Treasury market was mostly in the red, with the benchmark 10-year yield plummeting more than 9 basis points to below 4.09 percent. The 2-year yield, which tends to track the central bank’s key federal funds rate, fell by more than 10 basis points to 3.49 percent.

The 30-year yield also declined approximately 7 basis points to 4.8 percent after briefly touching 5 percent earlier this week.

The U.S. dollar index, a gauge of the greenback against a weighted basket of currencies including the British pound and Japanese yen, fell 0.7 percent to below 98.00. The index is still poised for a weekly gain of nearly 0.2 percent but remains down 10 percent this year.

“This is yet another alarming job report as under the hood, a lot seems to be going in the wrong direction,” Ken Mahoney, CEO of Mahoney Asset Management, said in a note emailed to The Epoch Times.

“The Federal Reserve, of course, has a dual mandate. And we believe that the Federal Reserve has picked the right spot and the weakness in labor markets to try to get in front of that.”

According to the CME FedWatch Tool, investors overwhelmingly expect monetary policymakers to cut interest rates by a quarter point.

Other Labor Market Data

Economic observers were given a snapshot of the U.S. labor market ahead of the August non-farm payrolls report.

Earlier this week, the bureau released the Job Openings and Labor Turnover Survey (JOLTS), revealing that the number of employment vacancies declined to below 7.2 million in July for the first time since September.

Quits—the number of individuals who voluntarily stepped down—were little changed. Economists use this measure to determine workers’ confidence in finding new jobs in today’s labor market.

Private sector hiring slowed last month, according to payroll processor ADP.

The July National Employment Report found that the private sector added a smaller-than-expected 54,000 new jobs, from a slightly upwardly revised 106,000.

Weekly jobless claims ticked up to their highest levels since mid-June. Initial Jobless claims rose by 8,000 to 237,000 for the week ending Aug. 30, from 229,000 in the previous week, Department of Labor data showed.

Recurring jobless claims—a gauge of the number of out-of-work individuals currently receiving unemployment benefits—dipped for the second straight week to 1.94 million.

Market watchers say that the elevated number indicates the difficulty people are having in locating new jobs.

Announced layoffs accelerated in August. Global outplacement firm Challenger, Gray & Christmas discovered that U.S.-based employers announced 85,979 planned job cuts, a three-month high and up 39 percent from July.

“We continue to see softness growing in the labor market as tariff policy uncertainty lingers, immigration changes take effect, and AI adoption grows,” Eric Teal, CIO for Comerica Wealth Management, said in a note emailed to The Epoch Times.

However, if the Federal Reserve follows through on a quarter-point interest rate cut later this month, the U.S. labor market and broader economy could receive a boost, Teal added.