US Unemployment Rate Hits 4.3%, Highest Since October 2021

US unemployment rates rose in August 2025 to 4.3%, their highest levels since October 2021. Only 22,000 new jobs were added to the economy last month, far below forecasts. Indeed, 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.

Another Disappointing US Jobs Report

Over the past three months, the US economy has created fewer than 30,000 new jobs, on average. The decline led to US President Donald Trump firing the Commissioner of the Bureau of Labor Statistics in July. Diving deeper into the latest statistics, average hourly earnings rose 0.3% over the past 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,” Capital Economics North America economist Bradley Saunders wrote in a report on Friday. He went on to add that this jobs report could have an impact on a potential interest rate cut this month. “While the weak 22,000 gain in non-farm payrolls in August confirms what already looked like a nailed-on rate cut at this month’s FOMC meeting, the limited rise in the unemployment rate to 4.3% will curb calls for a larger 50bp move.”

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Furthermore, for the first time since before the pandemic, there are now more unemployed workers than there are job openings. Still, businesses have become more hesitant to hire because of softer sales and uncertainty about how much the Trump administration’s tariffs will cost them. A rate cut could slow the decline in unemployment, but August’s decline is especially of concern with schools reopening and educational employees returning to work.