The August jobs report, due Friday, is expected to cap off one of the weakest summers for job creation in recent memory.
The Bureau of Labor Statistics report is projected to show nonfarm payrolls grew by just 53,000, according to the Dow Jones consensus estimate.
Even with that sluggish pace, economists expect the unemployment rate to hold steady at 4.1%, offering a thin silver lining.
The August reading follows June and July counts that together showed a net loss of 3,000 jobs across the broader economy.
Adding to the caution, initial August payroll numbers have been revised lower for four consecutive years, raising the possibility the actual figure could disappoint further.
The current state of the labor market is “stable but unexciting,” according to Dan North, senior economist for Allianz Trade North America.
“I don’t see a whole lot of really robust growth, which is understandable because if you’re an employer, you’re sitting here and you’ve got a war going on, energy prices going up and down, tariffs, and the administration changing everything overnight from day to day,” North said.
“So you’ve got a lot of uncertainties out there,” he added, pointing to geopolitical pressures and the rapid spread of artificial intelligence as dominant forces reshaping hiring decisions.
Despite those headwinds, companies have largely avoided widespread layoffs, with the total layoff pace in 2026 the slowest in four years, according to outplacement consultants Challenger, Gray and Christmas.
Federal Reserve officials have grown notably less concerned about the labor market, shifting their attention instead toward persistent inflation pressures.
Fed Governor Michael Barr earlier this week characterized the jobs situation as “stable,” while Governor Christopher Waller said Thursday the picture is in “satisfactory shape.”
Those tempered assessments suggest the Fed feels comfortable enough to consider raising rates without the labor market becoming a significant obstacle.
“Monthly payrolls readings have been softer in recent months, but low jobless claims and a steady unemployment rate have kept Fed officials unconcerned about the labor market,” said Citigroup economist Andrew Hollenhorst in a note.
Citigroup sees the August count at just 20,000 new jobs, following a loss of 23,000 in July, and projects the unemployment rate could tick up to 4.2%.
Hollenhorst still expects the Fed will view those numbers as “stable” and not a trigger for broader alarm, though Citi believes the central bank’s next policy move will ultimately be a rate cut.
Comments from Governor Waller on inflation led traders to price in the likelihood the Fed would hold rates steady at its meeting in less than two weeks.
Several factors beyond typical seasonal patterns are expected to weigh on the August figures, including the government’s July cancellation of Temporary Protected Status for thousands of Haitians.
That move has been projected to impact 350,000 Haitians, potentially reducing employment rolls in ways that could distort the headline number.
Vanguard’s proprietary data on 401(k) accounts points to a gain of just 8,000 jobs for August, partly due to a “noticeable decline” in hiring among workers aged 21 to 24.
