U.S. job growth weakened in August with a sharp increase in the unemployment rate, reaching nearly a four-year high of 4.3%. This has confirmed that labor market conditions are softening, prompting expectations for an interest rate cut from the Federal Reserve this month. The economy lost jobs in June for the first time in over four years, attributed to President Donald Trump’s import tariffs and immigration policies reducing the labor pool. With more unemployed individuals than job vacancies in July, uncertainties over trade policies continue to impact businesses, highlighting the need for stability in the labor market over inflation concerns.

Despite a disappointing job growth number in August, economists are hopeful for revisions that may ease the strain seen in various sectors like healthcare, social assistance, and government employment. The U.S. Treasury yields fell on the data, reflecting concerns over the declining labor market conditions and reinforcing the likelihood of a rate cut by the Fed.