Key Takeaways
- The U.S. economy lost 13,000 jobs in June, the Bureau of Labor Statistics said Friday, downwardly revising its estimate of a gain of 14,000 jobs. It was the first time since 2020 that the U.S. economy lost jobs.
- The labor market returned to growth in July but grew far more slowly in August than economists expected.
- Employers have curtailed hiring as tariffs push up prices and squeeze consumer budgets.
For the first time since the pandemic, the U.S. economy had a month of negative job creation.
The U.S. economy added 22,000 jobs in August, down from 79,000 in July, the Bureau of Labor Statistics said Friday. That was well short of the 75,000 jobs forecasters had expected, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. The unemployment rate ticked up to 4.3%, up from 4.2% in July, to the highest since October 2021.
Not only that, but the bureau downwardly revised its previous estimate for job creation in June to a loss of 13,000 jobs rather than the addition of 14,000 jobs previously reported. It was the first time since December 2020 that the U.S. economy had negative job growth.
According to surveys and other economic indicators, many employers have put hiring plans on hold as tariffs have pushed prices and squeezed consumer budgets. Although businesses have mostly avoided mass layoffs so far, the slowdown has raised concerns among economists and policymakers that the currently relatively low unemployment rate could rise significantly.
“The labor market is going from frozen to cracking,” Heather Long, chief economist at Navy Federal Credit Union, wrote in a commentary. “The United States barely added any jobs in the past four months. This is a white-collar and a blue-collar jobs recession.”
Most sectors of the economy lost jobs in August, with the job gains coming mainly from private education and health care, which added 46,000 jobs, and leisure and hospitality, which added 28,000 jobs.
Update, Sept. 5, 2025: This article was revised after publication to add a quote from an economist and information about which sectors gained jobs.