United States likely added 65,000 jobs last month, but jobseekers
struggle and pay gains are meager
[September 04, 2026] By
PAUL WISEMAN
WASHINGTON (AP) — The U.S. Labor Department is expected to report Friday
that the American job market bounced back last month from a dismal July,
even though jobseekers continue to struggle and pay gains are slight.
And the employment outlook remains clouded by a shortage of workers –
the result of President Donald Trump’s immigration crackdown and the
retirement of baby boomers – and by businesses’ stepped-up use of
technology to do tasks that human beings used to do.
The August jobs report likely showed that U.S. employers – companies,
government agencies and nonprofits – collectively added a net 65,000
jobs last month after they unexpectedly slashed 23,000 in July,
according to a survey of forecasters by the data firm FactSet.
Economists expect jobs at local schools to recover after plummeting by
50,000 in July in what they suspect was a statistical glitch in the
Labor Department’s seasonal adjustments.
The unemployment rate is expected to have ticked up to a still-low 4.2%
last month from 4.1% in July, FactSet says.
“It’s a very strange labor market,’’ David Kelly, chief global
strategist at J.P. Morgan Asset Management, wrote in a commentary
Monday.
The No. 1 puzzler: Hiring is weak, but layoffs are rare.
Employers haven’t been eager to take on new workers. The Labor
Department reported Tuesday that gross hiring — before subtracting
people who lost or left their jobs — fell 5% to fewer than 5.1 million
new jobs.
In July, companies, government agencies and nonprofits together cut
23,000 jobs. So far this year, employers are adding 61,000 jobs a month,
up from the 9,700 they averaged last year — the weakest hiring outside a
recession since 2002. The lingering effects of high interest rates and
Trump’s erratic trade policies discouraged companies from hiring in
2025.
Even though it’s rebounded from a bleak 2025, hiring this year remains
well below the 166,000 monthly jobs created, on average, in 2023 and
2024, let alone the 491,000 a month recorded during the 2021-2022 hiring
boom that followed pandemic lockdowns.
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 But the United States doesn’t need
as many jobs as it did until recently to keep the national
unemployment rate from rising. Trump’s immigration crackdown and
baby boomer retirements mean fewer people are competing for work.
More than 1.3 million people have dropped out of the U.S. labor
force over the past year.
As a result, the "break-even’’ rate of monthly hiring, 155,000 in
2023-2024, has dropped, perhaps to nearly zero, according to a
Federal Reserve study.
The Trump administration’s decision to withdraw work authorization
for 330,000 Haitian and Syrian immigrants on July 27 is likely to
worsen labor shortages, especially for specific workers such as
caregivers. But the Haitians and Syrians won’t show up in the
official unemployment rolls because they aren’t allowed to look for
work and therefore can’t be counted among the jobless.
Instead of looking to hire from a diminished pool of available
workers, “businesses are increasingly focused on boosting efficiency
through technology and AI and increasingly seek to do more with
their existing workforce,’’ EY-Parthenon economists Gregory Daco and
Lydia Boussour wrote in a commentary this week.
Still, even if they aren’t hiring aggressively, companies are
reluctant to let go of the staff they have. They retain memories of
the unexpected labor shortages that followed the end of COVID-19
lockdowns.
So unemployment remains low. For the past year, the number of people
applying each for unemployment benefits – a proxy for layoffs -- has
stayed in a historically low range of around 200,000 to 230,000.
The result is what economists call a “no-hire, no-fire″ labor market
in which those who have work enjoy job security, but times are tough
for young workers trying to land entry-level jobs or unemployed
people seeking to get back to work.
Wage gains last month were likely modest – bad news for families
already struggling to keep up with the high cost of living. EY-Parthenon’s
Daco and Boussour expect average hourly wages rose just 3% last year
from a year earlier, the weakest year-over-year gain since May 2021
when the economy was paralyzed by the pandemic.
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