US Jobs Report Sparks Stagflation Concerns Amid Rising Unemployment

The U.S. economy is showing clear signs of stagflation, with the August jobs report revealing a sharp slowdown in job creation and rising unemployment, marking the highest rate since 2021. President Trump’s administration has been criticized for policies contributing to this economic malaise, including tariffs that increase costs and restrictive immigration enforcement that limits labor supply, exacerbating inflation and slowing growth. Analysts warn that while some sectors like healthcare and AI support the economy, the overall outlook is grim, with risks of rising layoffs and a potential recession. The Federal Reserve faces pressure to cut interest rates amid these challenges, although concerns persist about sticky inflation and potential margin compression for companies. Market optimism remains tied to forward earnings estimates, but if these projections falter, equity markets may weaken. Globally, other countries are wary of American populist policies driving the economy toward stagflation, while awaiting upcoming U.S. inflation and sentiment data for clearer direction.