U
.S. August jobs add only 22 000, mortgage rates plunge

    The Bureau of Labor Statistics reported that the United States added just 22 000 jobs in August, a figure far below the roughly 75 000 economists had forecast. The data also included downward revisions to June’s employment figures and a modest uptick for July, leaving the agency’s combined June‑July total 21 000 jobs lower than previously reported. Unemployment edged up from 4.2 % in July to 4.3 % in August, the highest level since October 2021.

    This release is the first since President Donald Trump dismissed BLS Commissioner Erika McEntarfer, alleging political bias in earlier data. White House economic adviser Kevin Hassett called the numbers “a little bit disappointing” but expects the agency will “revise up” the August figures.

    Mortgage rates fell sharply after the report, with Mortgage News Daily recording a daily 30‑year fixed‑rate of 6.29 % on September 5. Freddie Mac had already reported a weekly average of 6.5 % the day before, after several consecutive weeks of declines. CEO Matthew Graham noted that “bad news for the labor market is good news for rates.” Real‑estate stocks rose in anticipation of lower borrowing costs and a potential boost to the sluggish housing market.

    Federal Reserve Chair Jerome Powell has said the central bank will closely monitor labor and inflation data as it considers cutting short‑term rates. Two weak jobs reports make a September rate cut “almost certain,” according to Bright MLS chief economist Lisa Sturtevant, who predicts a 25‑basis‑point move. Sam Williamson of First American added that a cut would ease pressure on prospective home buyers facing high mortgage rates and prices, potentially sparking a rebound in affordability if inventory improves and price growth moderates.

    Inflation remains the key wildcard. While core prices are still rising and overall inflation stays above the Fed’s target, the Trump‑era tariffs have not triggered significant spikes. Williamson suggested that with inflation not reaccelerating and job growth fading, the Fed might see an opportunity to recalibrate. Sturtevant warned that next week’s August inflation report will be decisive; if it shows higher inflation, the Fed’s decision could become more complicated.

    In short, the August jobs data has triggered a sharp drop in mortgage rates and a rally in real‑estate shares, while setting the stage for a likely Fed rate cut in September—provided inflation does not surge in the upcoming report.