US Employment Stays buoyant due to Healthcare Sector
In an unexpected turn of events, the U.S. economy added just 22,000 jobs in August, marking a significant slowdown compared to the anticipated 72,000 jobs, according to the Bureau of Labor Statistics (BLS). This subdued growth was largely attributed to the loss of 15,000 federal government jobs and revisions in BLS statistics for June and July.
The healthcare sector, however, emerged as the only substantial source of new jobs in an otherwise stagnant economy. The sector created 31,000 jobs in August, with residential care and hospitals each accounting for 9,000 new jobs, and ambulatory care contributing 13,000 new jobs. This growth, while lower than the 12-month average of 42,000 jobs per month, underscores the sector's resilience and continued importance in the economy.
Unfortunately, the same cannot be said for other sectors. Manufacturing, for instance, lost 12,000 jobs and has seen a decline of 78,000 jobs over the past 12 months. Transportation equipment manufacturing was particularly hard-hit, losing 15,000 jobs due to "strike activity." Wholesale trade and mining and oil and gas extraction also reported job losses, with 12,000 and 6,000 jobs lost respectively.
The unemployment rate for August ticked up to 4.3%, the highest level since 2021, with 7.4 million people classified as unemployed. This increase in unemployment was accompanied by a slight rise in average hourly earnings. For all employees on private nonfarm payrolls, earnings rose by 10 cents, or 0.3%, to $36.53 in August. Private-sector production and nonsupervisory employees saw a more substantial increase, with earnings rising by 12 cents, or 0.4%.
Over the past 12 months, average hourly earnings have increased by 3.7%. This wage growth, coupled with the relatively low unemployment rate, suggests a tight labour market. However, the slow job growth in August raises concerns about the sustainability of this trend.
The loss of federal jobs was a significant contributor to the low employment growth in August. Nearly 100,000 federal jobs have been eliminated since the start of 2025, and the loss of 15,000 jobs in August added to this trend.
In a separate development, the U.S. health agencies, including the FDA, reported planned reductions of about 10,000 full-time positions, resulting in a shrinking of the sector from 82,000 to 62,000 employees between January and August 2025.
Despite these challenges, the U.S. has still created 598,000 new jobs so far in 2025, a decrease compared to the 1.14 million jobs created this far in 2024. As the economy continues to navigate these changes, the focus remains on fostering job growth and maintaining a strong labour market.
