August 2025 Jobs Report: Just 22,000 Positions Added as June Revised to First Job Loss Since Pandemic

The August 2025 employment report confirmed the U.S. labor market's dramatic deterioration, adding just 22,000 jobs, far below the 75,000 consensus forecast and representing the weakest monthly performance of 2025. The unemployment rate climbed to 4.3% from 4.2%, reaching its highest level since October 2021, according to the Bureau of Labor Statistics report released September 5.

But the report's most shocking revelation came from revisions to previous months: June was revised from positive 14,000 jobs to negative 13,000, marking the first monthly job loss since December 2020 and confirming that the labor market began contracting three months ago. July was revised upward by 6,000 to 79,000 jobs, providing little comfort given the overall trajectory.

August marked the fourth consecutive month where job gains fell below 100,000, a sustained weakness not seen outside recession periods. Healthcare continued carrying the entire labor market with 31,000 jobs, while manufacturing and wholesale trade each shed 12,000 positions, and federal employment fell by another 15,000, bringing total government job losses to 94,000 since January.

The Headline Numbers: Stalling Labor Market

The August employment report revealed a labor market approaching stall speed across virtually every dimension:

• Jobs Added: 22,000 new nonfarm payroll positions (vs. 75,000 consensus estimate)
• Unemployment Rate: 4.3%, up from 4.2% in July (highest since October 2021)
• Four-Month Average: Just 49,000 jobs per month (May-August)
• Labor Force Participation Rate: 62.2%, unchanged but down 0.5% from August 2024
• Average Hourly Earnings: Up 0.3% monthly, +3.7% year-over-year
• Wage Growth: 3.7% annually, below 3.8% forecast

Critical Revisions to Previous Months:

• June 2025: Revised from +14,000 to -13,000 jobs (first monthly decline since December 2020)
• July 2025: Revised from 73,000 to 79,000 jobs (up 6,000)
• Net Revision Impact: 7,000-job downward adjustment

The 22,000-job gain falls within the statistical margin of error for zero, meaning August may ultimately be revised to show flat or negative employment. When combined with June's confirmed job loss and July's minimal gain, the three-month period (June-August) produced just 88,000 total jobs, averaging under 30,000 per month.

The unemployment rate's climb to 4.3% marks the highest level since October 2021, representing a full percentage point increase from the 3.3% rate seen as recently as mid-2023. While 4.3% remains historically moderate, the direction and pace of increase signal concerning weakness. The rate has risen in five of the past six months, a pattern that historically precedes or coincides with recessions.

Average hourly earnings grew 3.7% year-over-year, decelerating from 3.9% in July and falling short of the 3.8% forecast. This moderation provides the Federal Reserve flexibility to cut rates without worrying about wage-driven inflation, but also reflects diminishing worker bargaining power as labor market conditions soften.

The June Revision Shock: First Job Loss Since Pandemic Recovery

The revision of June's employment figure from positive 14,000 to negative 13,000 represents a watershed moment in the 2025 labor market narrative. This marks the first monthly job decline since December 2020, when the pandemic recovery was just beginning. The implications are profound:

Historical Significance: The U.S. economy had maintained 42 consecutive months of job growth from January 2021 through May 2025. June's revised job loss breaks this streak and signals the labor market crossed from expansion into contraction three months ago, even as initial reports suggested modest growth.

Revision Pattern: June has now been revised three times:

• Initial July 3 report: +147,000 jobs (appeared solid)
• August 1 revision: +14,000 jobs (massive 133,000-job downward revision)
• September 5 revision: -13,000 jobs (additional 27,000-job downward adjustment)
• Total revision: 160,000-job swing from initial estimate

The scale of these revisions suggests the labor market weakened far faster than real-time data could capture. When initial reports miss by 160,000 jobs, it indicates either survey response problems, seasonal adjustment model failures, or economic deterioration so rapid that preliminary estimates cannot keep pace.

What Job Loss Means: A negative jobs month doesn't automatically signal recession, but it raises the probability substantially. Since 1990, every recession has been preceded by or contained monthly job losses. While single-month declines can occur outside recessions (particularly due to strikes, natural disasters, or statistical noise), June's job loss combined with August's near-zero gain suggests systemic weakness rather than one-time events.

The Three-Month Picture: June's 13,000 job loss, July's 79,000 gain, and August's 22,000 gain produce a three-month total of just 88,000 jobs (averaging under 30,000 per month). For context, the U.S. economy typically needs 80,000-100,000 jobs monthly just to keep pace with population growth. At 30,000 per month, employment is growing far slower than the working-age population, meaning the employment rate is declining even with unemployment rising.

Four Consecutive Months Below 100,000: A Troubling Pattern

August marks the fourth consecutive month where job gains fell below 100,000:

• May 2025: 19,000 jobs (revised)
• June 2025: -13,000 jobs (revised)
• July 2025: 79,000 jobs (revised)
• August 2025: 22,000 jobs
• Four-Month Total: 107,000 jobs (average 26,750 per month)

Four consecutive months below 100,000 jobs, with an average gain of just 27,000, represents the most sustained period of labor market weakness since the pandemic recovery ended. Outside recession periods, it's rare to see such extended softness. The pattern suggests employers have fundamentally shifted their hiring posture from cautious expansion to active contraction or extreme conservatism.

Historical context: The last time the U.S. experienced four consecutive months averaging under 30,000 jobs was during the 2008-2009 recession and its immediate aftermath. While current unemployment at 4.3% remains well below recessionary levels, job growth this anemic typically precedes unemployment reaching those levels.

Sector-by-Sector Breakdown: Healthcare Alone Prevents Negative Growth

Healthcare: +31,000 Jobs (141% of Net Growth)

Healthcare added 31,000 positions in August, accounting for more than all net job growth. Without healthcare, the U.S. economy would have posted a net job loss of 9,000 positions. This extreme dependence on a single sector represents an unsustainable growth pattern:

• Hospitals: Added approximately 12,000 positions
• Ambulatory Healthcare Services: Gained 10,000 jobs
• Nursing and Residential Care: Added 6,000 positions
• Home Healthcare Services: Contributed 3,000 jobs

Healthcare's 31,000-job gain represents a deceleration from July's 73,300 but maintains the sector's position as the only consistent source of employment growth. The sector's resilience reflects structural demographic drivers (aging population, chronic disease prevalence) that persist regardless of economic cycles.

However, relying on one sector for all job creation signals an economy losing breadth. If healthcare hiring were to slow due to reimbursement pressures, capacity constraints, or financial stress on providers, the entire employment picture could turn sharply negative.

Social Assistance: +16,000 Jobs

Social assistance services added 16,000 positions, primarily in individual and family services (+10,000) and childcare (+4,000). While positive, this represents a deceleration from recent months when gains typically exceeded 18,000-20,000.

Leisure and Hospitality: +28,000 Jobs

Leisure and hospitality added 28,000 positions, the sector's strongest showing since May. The August gain reflected late-summer tourism and entertainment demand across restaurants (+15,000), hotels and accommodation (+8,000), and recreation (+5,000).

However, even this positive performance requires context. August typically sees strong leisure/hospitality hiring for summer season staffing. The 28,000 gain, while decent, falls short of typical August patterns in stronger labor markets when gains often exceed 40,000-50,000.

Construction: Essentially Flat

Construction employment showed essentially no change in August (±500 jobs), a disappointing result for peak summer building season. Elevated interest rates continue constraining residential construction, while commercial real estate challenges and public sector budget pressures limit infrastructure and non-residential projects.

Manufacturing: -12,000 Jobs

Manufacturing shed 12,000 positions, marking the third consecutive month of job losses (for more on which companies are cutting jobs, see our companies and layoffs tracker):

• June 2025: -7,000 jobs (revised)
• July 2025: -11,000 jobs
• August 2025: -12,000 jobs
• Three-Month Total: -30,000 jobs

The accelerating pace of manufacturing job losses (from 7,000 in June to 12,000 in August) suggests intensifying pressure from tariff uncertainties, strong dollar impacts on exports, weak global demand, and automation investments reducing labor intensity. Losses spanned both durable goods (down 7,000) and nondurable goods (down 5,000).

Wholesale Trade: -12,000 Jobs

Wholesale trade shed 12,000 positions as distributors reduced staffing amid weakening demand signals. The sector's sustained weakness (also losing jobs in July) confirms challenges across the goods production and distribution chain.

Retail Trade: Essentially Flat

Retail employment showed minimal change (±500 jobs), suggesting cautious staffing as back-to-school season approached. Retailers appear uncertain about consumer spending sustainability, choosing to operate lean rather than risk overstaffing.

Federal Government: -15,000 Jobs

Federal employment fell by another 15,000 positions, bringing total federal job losses since January 2025 to 94,000. This sustained downsizing mirrors broader corporate layoffs occurring across multiple sectors. The sustained workforce reduction continues at an accelerating pace:

• Q1 2025: Average 11,500 federal jobs lost per month
• Q2 2025: Average 9,000 federal jobs lost per month
• July-August: Average 12,500 federal jobs lost per month

With nearly 100,000 federal positions eliminated in eight months, the pace shows no signs of slowing. The cuts continue creating cascading effects through government contractors, the Washington D.C. metro economy, and the broader federal ecosystem.

Professional and Business Services: Minimal Change

Professional and business services showed essentially flat employment (±1,000 jobs), but underlying weakness persisted. Temporary help services lost another 5,000 positions, continuing a trend that has seen temp employment decline in each of the past six months. Major employers like Amazon and Microsoft have similarly scaled back contractor hiring. Temp hiring typically serves as a leading indicator, with businesses reducing flexible staffing before cutting permanent employees.

What August Means for Job Seekers and Workers

The August employment report and associated revisions paint the most challenging picture for job seekers and workers since the pandemic recovery ended:

The Stark Reality:

• Only 22,000 jobs added, weakest of 2025
• Unemployment at 4.3%, highest since October 2021
• June revised to first job loss (-13,000) since December 2020
• Four consecutive months below 100,000 jobs
• Federal employment cuts accelerating (94,000 since January)
• Manufacturing shedding jobs three months straight (30,000 total)
• Temp hiring declining six consecutive months
• Retail and construction essentially frozen

Extremely Limited Opportunities:

• Healthcare adding 31,000 jobs (only significant growth sector)
• Social assistance growing modestly (16,000 positions)
• Leisure/hospitality showing late-summer strength (28,000 jobs)
• Everything else stagnant or declining

For active job seekers, August's report confirms a labor market that has moved from difficult to extremely challenging. Healthcare remains the only sector with consistent opportunities, particularly in hospitals, nursing facilities, and home health services. For industry-specific hiring trends, visit our analytics dashboard. Competition for these positions intensifies as workers from other sectors pivot toward healthcare.

Social assistance offers limited opportunities for workers in childcare, counseling, and support services. Leisure and hospitality's late-summer hiring provides seasonal options, but these positions are typically lower-wage and may not persist into fall.

For workers in manufacturing, wholesale trade, professional services, retail, or construction, opportunities have essentially vanished. Businesses in these sectors are either maintaining skeleton crews, reducing headcount, or freezing hiring entirely.

Currently employed workers face a critical decision point: stay put regardless of satisfaction levels, or risk unemployment that could extend for months given the weak job market. The era of easy job-switching for better opportunities has definitively ended. Workers should focus on strengthening their current positions, building resilience, and preparing for potential layoffs rather than pursuing speculative opportunities.

Federal employees and contractors face continued uncertainty with workforce reductions accelerating. Nearly 100,000 federal jobs lost in eight months represents one of the most aggressive federal workforce reductions in modern history outside crisis periods. Those in government-adjacent roles should actively pursue exit strategies toward private sector opportunities in still-growing sectors like healthcare.

Economic Context: Recession Risk Rising

August's employment report, combined with June's revised job loss, significantly elevates recession risk. While no single indicator guarantees recession, the combination of factors suggests the economy is either entering or approaching recession:

Sahm Rule Triggered: The unemployment rate's increase from 3.5% earlier in 2025 to 4.3% in August triggers the Sahm Rule recession indicator. This rule states that when the three-month moving average of the unemployment rate rises 0.5 percentage points or more above its low in the previous 12 months, the economy is typically in recession. The current increase exceeds this threshold.

Federal Reserve Response Certain: The August employment data virtually guarantees the Federal Reserve will cut interest rates at its September 17-18 meeting. Market expectations show 100% probability of at least a 25-basis-point cut, with growing expectations for a more aggressive 50-basis-point reduction.

However, rate cuts typically take 6-12 months to stimulate employment. Even if the Fed cuts aggressively, the labor market will likely continue weakening through late 2025 and early 2026 before any policy benefits materialize.

Manufacturing Recession Confirmed: Three consecutive months of manufacturing job losses totaling 30,000 positions confirms the sector is in recession. Tariff uncertainties, strong dollar impacts, and weak global demand create a perfect storm for manufacturers.

Government Fiscal Drag: Federal workforce reductions totaling 94,000 jobs through August continue creating negative multiplier effects through contractors, reduced government spending, and economic uncertainty. These deliberate cuts represent contractionary fiscal policy that offsets any monetary stimulus the Fed might provide.

Consumer Spending Concerns: With unemployment rising and job creation stalling, consumer spending faces headwinds. Retail's frozen hiring and wholesale trade's job losses suggest businesses anticipate weaker consumer demand ahead.

JOLTS Data Reinforces Weakness

The Job Openings and Labor Turnover Survey (JOLTS) for August 2025, released September 30, showed job openings essentially unchanged at 7.2 million, the same level as July. However, this stability masks underlying weakness:

• Job Openings: 7.2 million (unchanged from July)
• Openings-to-Unemployed Ratio: Approximately 1.0 (one opening per unemployed person)
• Hires: Declining to approximately 5.0 million
• Quits: Falling as workers lose confidence in finding new positions

When the openings-to-unemployed ratio falls to 1.0 or below, it signals a balanced-to-soft labor market where workers no longer enjoy leverage. At the 2022 peak, this ratio exceeded 2.0, giving workers multiple options and strong bargaining power. The decline to 1.0 represents a fundamental shift in labor market dynamics.

Looking Ahead: Critical September Decision

As the economy moves into fall 2025, several critical questions will shape the labor market's trajectory:

September Employment Report (Released Oct 4): Will September show continued weakness below 50,000 jobs, or a rebound above 100,000? Another weak print would confirm recession is underway. A rebound above 150,000 could suggest August was an anomaly, though that appears unlikely given June's job loss and four months of sustained weakness.

Federal Reserve September Decision: Will the Fed cut rates 25 or 50 basis points? A 25-point cut signals confidence the slowdown is manageable. A 50-point cut acknowledges recession risk requires aggressive action. Markets currently price 100% probability of at least 25 points, with 40% odds of 50 points.

Revision Pattern: Will September's report include further downward revisions to July and August? If so, it would confirm economic data continues lagging reality, suggesting the labor market is weaker than even current dismal figures suggest.

Federal Workforce Cuts: Will the pace of federal job losses (94,000 through August) continue accelerating toward 100,000+ by year-end? The trajectory will significantly impact government contractors and the D.C. economy.

Manufacturing Stabilization: Can manufacturing halt its three-month slide (30,000 jobs lost), or will trade uncertainties and weak demand drive further declines? Manufacturing often leads broader economic cycles, making this sector critical to monitor.

Conclusion: Labor Market Confirms Significant Weakening

The August 2025 employment report showed the U.S. labor market adding just 22,000 jobs with unemployment rising to 4.3%, the highest level since October 2021. The report confirmed that labor market weakness is far more severe than real-time data initially suggested, with June revised to show the first monthly job loss (down 13,000) since December 2020.

August marked the fourth consecutive month where job gains fell below 100,000, with the May-August period producing just 107,000 total jobs (averaging 27,000 per month). Healthcare accounted for more than all net job growth with 31,000 positions, while manufacturing (down 12,000), wholesale trade (down 12,000), and federal government (down 15,000) shed jobs. Federal employment losses reached 94,000 since January.

The report virtually guarantees Federal Reserve rate cuts in September, with markets pricing 100% probability of at least 25 basis points and growing expectations for 50 points. However, monetary policy operates with long lags, meaning labor market conditions will likely continue deteriorating through late 2025 regardless of Fed actions.

For workers and job seekers, August's report confirms the most challenging labor market since the pandemic recovery ended. Healthcare offers the only consistent opportunities, while most other sectors are stagnant or declining. Currently employed workers should prioritize job security over advancement opportunities, as extended unemployment has become the norm for job seekers.

The key question for the remainder of 2025 is whether the labor market's weakness represents a temporary soft patch that will improve with Fed rate cuts, or the beginning of a recession that will drive unemployment significantly higher and job losses broader. September's employment report will provide critical evidence, but the combination of June's job loss, four months of sub-100,000 growth, and rising unemployment suggests the economy has already entered or is entering recession.

Data sources: U.S. Bureau of Labor Statistics Employment Situation Summary (released September 5, 2025) and Job Openings and Labor Turnover Survey (released September 30, 2025 for August data). All statistics represent preliminary data subject to revision in subsequent monthly reports.

Article Updates

September 5, 2025: Initial publication based on BLS Employment Situation report for August 2025. Report showed 22,000 jobs added (weakest of 2025), unemployment at 4.3% (highest since October 2021), and June revised to negative 13,000 jobs, marking the first monthly decline since December 2020.

September 30, 2025: Updated with JOLTS data for August 2025. Job openings remained unchanged at 7.2 million, with the openings-to-unemployed ratio falling to approximately 1.0, indicating a balanced-to-soft labor market. Hires declined to around 5.0 million, while quits fell as worker confidence deteriorated. The data reinforces the employment report's message of significant labor market weakness and confirms the economy's transition from worker-favorable to employer-favorable conditions.