The latest figures set the stage for what economists forecast will be another weak monthly jobs report from the Bureau of Labor Statistics (BLS) on Friday. Consensus estimates project the economy added just 80,000 jobs in August, only a slight improvement over July's stunningly low gain of 73,000 jobs. That previous report, which also included downward revisions wiping out a combined 250,000 jobs from May and June, triggered political drama and the firing of the BLS commissioner by President Trump.
"The labor market is showing signs of cracking," said Heather Long, senior 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 slowdown is reflected in several key metrics:
- Private Hiring Slows: ADP's monthly report showed private businesses added just 54,000 jobs in August, nearly half of July's already modest gain.
- Unemployment Claims Rise: First-time jobless claims climbed to an 11-week high of 237,000.
- Layoffs Spike: August saw the highest number of layoff announcements for that month since the pandemic and, before that, the Great Recession.
Economists note that the labor market was expected to cool from its post-pandemic hiring surge, but the current "low-hire, low-fire" environment leaves workers with fewer opportunities. Factors contributing to the slowdown include an aging workforce, reduced immigration, and significant policy uncertainty from the Trump administration's whipsaw tariff strategy.
All eyes are now on Friday's official report for signs of whether this is a concerning stall or a structural shift to a new normal. Key details to watch will be revisions to previous months' data, whether job growth remains narrowly concentrated in sectors like healthcare, and if the unemployment rate for Black workers—which jumped to a four-year high of 7.2% in July—continues to climb.