Job Growth Slowed Sharply in August

Job growth slowed sharply in August, and the unemployment rate rose to its highest level in nearly four years. The latest jobs report, along with downward revisions to previous months' data, indicates a continued cooling in the U.S. labor market. This softening trend is likely to increase pressure on the Federal Reserve to consider an interest rate cut at its upcoming September meeting.

National Employment

So far in 2025, monthly job growth has averaged 75,000, a significant slowdown compared to the 168,000 monthly average gain for 2024.

According to the Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment showed little change in August, with a modest gain of 22,000 jobs. June's job growth was revised down by 27,000, from an initial estimate of +14,000 to -13,000, marking the first negative monthly job growth since January 2010. July's job growth was revised up by 6,000, from 73,000 to 79,000. Combined, the revisions erased 21,000 jobs from previously reported figures.

The unemployment rate rose to 4.3% in August, its highest level in nearly four years.

Construction Employment

Employment in the overall construction sector declined by 7,000 in August, marking the third consecutive month of job losses in the industry. Downward revisions to June and July figures further underscore the sector's ongoing weakness. Within the industry, residential construction lost 6,100 jobs, while non-residential construction employment declined by 1,200 jobs during the month.

Residential construction employment now stands at 3.3 million in August, broken down as 954,000 builders and 2.4 million residential specialty trade contractors.

In August, the unemployment rate for construction workers rose to 3.9% on a seasonally adjusted basis. The unemployment rate for construction workers has remained at a relatively lower level, after reaching 15.3% in April 2020 because of the housing demand impact of the COVID-19 pandemic.

NAHB Senior Director of Forecasting and Analysis Jing Fu provides additional analysis in this Eye on Housing post.