The data also showed the economy lost jobs in June for the first time in 4-1/2 years

FPJ News Service mumbai

U.S. job growth weakened sharply in August while the unemployment rate increased to nearly a four-year high of 4.3%, confirming that labor market conditions were softening and sealing the case for an interest rate cut from the Federal Reserve this month, Reuters reported.

The Labor Department's closely watched employment report on Friday also showed the economy lost jobs in June for the first time in 4-1/2 years. Job growth has shifted into stall-speed, with economists blaming President Donald Trump's sweeping import tariffs and an immigration crackdown that has reduced the labor pool. Softness in the labor market is mostly coming from the hiring side. There were more unemployed people than vacancies in July for the first time since the pandemic.

Trump's duties, which have boosted the nation's average tariff rate to the highest level since 1934, stoked fears of higher inflation, prompting the U.S. central bank to pause its interest rate cutting cycle. Just as some of the uncertainty over trade policy was starting to lift, a U.S. appeals court ruled last Friday that many of the duties were illegal.

"The warning bell that rang in the labor market a month ago just got louder," said Olu Sonola, head of U.S. economic research at Fitch Ratings. "The Fed is likely to prioritize labor market stability over its inflation mandate, even as inflation drifts further from the 2% target. It's hard to argue that tariff uncertainty isn't a key driver of this weakness."