U.S. Job Growth Slows Sharply as Rate Cut Looms

U.S. job growth slowed significantly in July 2025, with only 73,000 jobs added and the unemployment rate rising to 4.2%, reflecting the weakest three-month payroll growth since the early COVID-19 pandemic. May and June job gains were revised down by a combined 258,000 jobs. Economists attribute the slowdown to heightened uncertainty from President Trump’s trade policies and newly implemented tariffs, which have particularly affected manufacturing and retail sectors. Wage growth increased by 0.3% in July and continues to outpace inflation, but this has not offset concerns about overall economic momentum. The weak jobs data have increased market expectations for a Federal Reserve interest rate cut as soon as September. Fed Chair Jerome Powell and other policymakers are urging caution and close monitoring of labor and inflation trends amid persistent economic uncertainty.