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U.S. inflation ticked higher in August. Here’s what’s to know about the increase.
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U.S. inflation ticked higher in August. Here’s what’s to know about the increase. – CBS News
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Asian shares track Wall Street rallies as a US interest rate cut next week looks more certain
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MANILA, Philippines — Asian shares rose on Friday, tracking Wall Street’s record-setting run the previous after a mixed set of U.S. data bolstered expectations that the Federal Reserve will cut interest rates to boost the economy.
Japan’s Nikkei 225 set another intra-day high, rising for the third day and adding 0.9% to 44,781.09. Shares in semiconductor company Tokyo Electron, Sony Group and Fast Retailing were among the movers.
In Chinese markets, Hong Kong’s Hang Seng index rose 1.5% to 26,484.65, lifted by a report that Beijing may order state banks to help cover unpaid bills of local governments. The Shanghai Composite index inched 0.2% to 3,877.38
In Seoul, the Kospi climbed 1.3% to 3,387.02 while Australia’s S&P/ASX 200 added 0.7% to 8,867.90. India’s BSE Sensex rose 0.3% while Taiwan’s Taiex was up 0.6%.
“What’s moving markets now isn’t just another rally — it’s the unmistakable shift of a dovish Fed tide, the kind that doesn’t rise in isolation but swells across oceans, lifting virtually every boat in every harbour,” Stephen Inness of SPI Asset Management said in a market commentary.
Wall Street’s record-setting run kept rolling on Thursday, and stocks climbed after a mixed set of U.S. data kept the path clear for the Federal Reserve to cut interest rates to boost the economy.
The S&P 500 rose 0.8% and set an all-time high for the third straight day. The Dow Jones Industrial Average rallied 617 points, or 1.4%, and the Nasdaq composite gained 0.7%. Both also hit records.
Treasury yields eased in the bond market following the economic reports, which were some of the final data releases left that could sway the Federal Reserve’s thinking before its meeting next week. The unanimous expectation on Wall Street is that it will cut its main interest rate for the first time this year.
The hope on Wall Street has been for a slowdown, but a precisely measured one. The job market has to be weak enough to get the Fed to cut interest rates, which can give a kickstart to the economy and to prices for investments, but not so much that it causes a recession.
The Fed has been hesitant to cut interest rates throughout 2025 because of the threat that President Donald Trump’s tariffs could make inflation worse. Lower interest rates can push inflation even higher.
A report on inflation Thursday showed that prices are continuing to rise faster for U.S. households than the Fed’s 2% target, but no more than economists expected. Consumers paid prices for food, gasoline and other costs of living that were 2.9% higher in August than a year earlier, a slight acceleration from July’s 2.7% inflation rate.
Traders believe the Fed will see the slowing job market as the bigger problem than inflation.
Stocks of companies that could benefit from lower interest rates rallied on Wall Street, including owners of real estate and homebuilders.
In other dealings on Friday, benchmark U.S. crude shed 53 cents to $61.84 per barrel. Brent crude, the international standard, slipped 51 cents to $65.86 per barrel.
The U.S. dollar rose to 147.51 yen from 147.15 yen. The euro slid to $1.1729 from $1.1740.
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AP Business Writer Stan Choe contributed.
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CPI rose at a rate of 2.9% in August as U.S. inflation ticked higher
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The Consumer Price Index rose 2.9% in August from a year earlier, matching economists’ forecasts that prices would pick up slightly as President Trump’s tariffs filtered through the economy.
By the numbers
The CPI was expected to rise 2.9% last month, according to economists polled by financial data firm FactSet.
The CPI, a basket of goods and services typically bought by consumers, tracks the change in prices on everyday items such as food and apparel over time. So far this year, inflation has stayed at 3% or lower, with July’s CPI reading at 2.7%.
Despite that, inflation has been creeping higher in recent months, edging away from the Federal Reserve’s 2% annual target. That’s causing some Americans to feel more sour about the economy, with a recent CBS News poll finding that two-thirds of consumers said prices in the past few weeks have continued to rise.
What economists say
Some economists point to the Trump administration’s wide-ranging tariffs as pushing prices higher. That’s because U.S. businesses pay the import duties to the federal government and then pass on some of those costs to consumers in the form of costlier goods.
So far in 2025, the Federal Reserve has held off on cutting rates due to the potential for tariffs to reignite inflation. Because rate reductions make it cheaper to borrow, they can spur businesses and consumers to open their wallets, adding to inflationary pressures.
Yet with the labor market showing signs of strain, Fed Chair Jerome Powell last month signaled that the door may be open for a rate cut at the central bank’s Sept. 17 meeting. Cutting rates can spur hiring by making it cheaper for businesses to borrow, and therefore easier to expand and add employees.
Under the Fed’s so-called “dual mandate,” the central bank is required to promote full employment while keeping inflation in check.
Despite the rise in inflation, the Fed is likely still on track for a rate cut next week, said Seema Shah, Chief Global Strategist at Principal Asset Management, noting that the weaker jobs data will likely outweigh concerns about higher prices.
“While the CPI report is a tad hotter than expected, it will not give the Fed a moment of hesitation when they announce a rate cut next week,” she said in an email.
What’s getting pricier
Some items getting more expensive are products that are largely imported, such as coffee, which soared 21.7% from a year ago, and furniture, which rose 4.7%. Imports are subject to U.S. tariffs based on country of origin, with the Trump administration adding new duties that start at 10% and scale higher.
“There were once again some signs of tariff effects putting upward pressure on goods prices,” noted Capital Economics in a research note, pointing to higher costs for appliances and other home products.
Day-to-day costs also increased at a faster pace, with food prices rising by 3.2% from a year ago, largely driven by higher restaurant prices, the data showed.
Those pressures are being felt by many consumers, with some telling CBS News that their expenses have only increased in the past year. Some say that they’re cutting back on discretionary spending to cope with a rise in household costs.
“Everything overall is more expensive — my groceries for example — and I hope for things that are on sale. I plan everything we’re going to have for the week,” said Kali Daugherty, 40, an executive director of a nonprofit in Milwaukee, Wisconsin.
She said she’s spending about $275 to $300 every two weeks on groceries for her family, up from about $175 to $200 a year ago. “There’s no wiggle room anymore,” she added.
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Inflation shoots higher as Trump tariffs ripple through economy | Fortune
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Inflation moved higher last month as the price of gas, groceries, hotel rooms and airfare rose, along with the cost of clothes and used cars.
Consumer prices rose 2.9% in August from a year earlier, the Labor Department said Tuesday, up from 2.7% the previous month and the biggest increase since January. Excluding the volatile food and energy categories, core prices rose 3.1%, the same as in July. Both figures are above the Federal Reserve’s 2% target.
The reading is the last data the Fed will receive before its key meeting next week, when policymakers are widely expected to cut their short-term rate to about 4.1% from 4.3%. Still, the figures underscore the challenges the Fed is facing as it experiences relentless pressure from President Donald Trump to cut rates.
Even as inflation has ticked higher, recent government reports have also shown that hiring has slowed sharply in recent months and was lower than previously estimated last year. The unemployment rate ticked up in August to a still-low 4.3%. And weekly unemployment claims rose sharply last week, a sign layoffs may be picking up.
Typically the Fed would cut its key rate when unemployment rose to spur more spending and growth. Yet it would do the opposite and raise rates — or at least keep them unchanged — in the face of rising inflation. Last month, Chair Jerome Powell signaled that Fed officials are increasingly more concerned about jobs, and are likely to cut their rate when they meet next week. Yet stubbornly high inflation could keep the Fed from cutting very quickly.
On a monthly basis, overall inflatin accelerated, as prices rose 0.4% from July to August, faster than the 0.2% pace the previous month. Core prices rose 0.3% for the second straight month.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
WASHINGTON (AP) — U.S. inflation likely ticked higher last month as the Trump administration’s import taxes have lifted the price of goods, potentially putting the Federal Reserve in a tough spot when it meets next week.
Economists forecast that consumer prices rose 2.9% in August from a year earlier, according to a survey of economists by data provider FactSet. That would be an increase from an annual pace of 2.7% in July. Excluding volatile food and energy costs, core inflation is expected to have increased 3.1%, the same as in July. Both figures are above the Fed’s 2% inflation target.
The potential increases, while modest, would underscore the challenges the Fed is facing as it experiences relentless pressure from President Donald Trump to reduce its short-term interest rate. Trump hopes that rate cuts will spur more borrowing and spending and boost the economy.
Recent government reports have also shown that hiring has slowed sharply in recent months and was lower than previously estimated last year, a sign that companies may be worried about future sales and are less interested in adding staff. The unemployment rate ticked up in August to a still-low 4.3%.
Typically the Fed would cut its key rate when unemployment rose to spur more spending and growth. Yet it would do the opposite and raise rates — or at least keep them unchanged — in the face of rising inflation. Last month, Chair Jerome Powell signaled that Fed officials are increasingly more concerned about jobs, and are likely to cut their rate when they meet next week. Yet stubbornly high inflation could keep the Fed from cutting very quickly.
On a monthly basis, prices are expected to have risen at an accelerated pace, increasing 0.3% from July to August. Core prices are expected to also increase 0.3% on a monthly basis. The cost of groceries and gas are forecast to have risen last month.
Still, Powell suggested in remarks in August that tariffs could simply lead to a one-time increase in prices, rather than ongoing inflation. If so, that would make it easier for the Fed to keep cutting its key rate. Wall Street investors expect the Fed to implement three cuts this year, according to futures pricing tracked by CME Fedwatch.
The inflation data arrives at the same time that Trump has sought to fire Fed governor Lisa Cook as part of an effort to assert more control over the Fed. Yet late Tuesday, a court said the firing was illegal and ruled that Cook could keep her job while the dispute played out in the courts.
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Christopher Rugaber, The Associated Press
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Asian shares are mostly up after US stocks inch to more records as inflation slows
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MANILA, Philippines — World shares were mostly higher Thursday, buoyed by gains of tech-related stocks after Wall Street inched to more records following a surprisingly encouraging report on inflation and a stunning forecast for growth from Oracle because of the artificial intelligence boom.
In early European trading, Germany’s DAX was nearly flat at 23,631.29. Britain’s FTSE 100 rose 0.4% to 9,259.17, while France’s CAC 40 climbed 0.5% to 7,803.52.
In Tokyo, the Nikkei 225 added 1.2% to 44,372.50, with tech investment company SoftBank Group’s shares jumping 8.3% in a second straight day of gains.
Data released Thursday showed Japan’s producer prices rose 2.7% year-on-year in August from a 2.5% rise the previous month, in line with market expectations. The higher cost of food, transport equipment and machinery contributed to the rise in prices.
In Chinese markets, Hong Kong’s Hang Seng index slid 0.4% to 26,086.32 while the Shanghai Composite index rose 1.7% to 3,875.31.
Shares of chipmaker Semiconductor Manufacturing International Corp added more than 6%, while Hua Hong Semiconductor rose 3.8%. Cambricon Technologies, often called China’s Nvidia, climbed 9%.
South Korea’s Kospi climbed 0.9% to 3,344.20 while Australia’s S&P/ASX 200 was down 0.3% to 8,805.00. India’s BSE Sensex added nearly 0.2% while Taiwan’s Taiex rose 0.1%, trimming earlier gains.
The future for the S&P 500 rose 0.1% while that for the Dow Jones Industrial Average added less than 0.1%.
“Asia’s Thursday tape was the kind of market that looks lively from a distance but flat when you press your nose against the glass. After Wall Street’s record sprint, traders in Tokyo and Seoul tried to carry the baton. Still, Hong Kong and Sydney promptly fumbled it, leaving the MSCI Asia-Pacific index pacing on the spot after five straight daily advances,” Stephen Innes of SPI Asset Management said in a market commentary.
On Wall Street, the S&P 500 rose 0.3% on Wednesday and set an all-time high for a second straight day. The Dow Jones Industrial Average dropped 220 points, or 0.5%, and the Nasdaq composite edged up by less than 0.1% after both set records the day before.
Stocks have hit records in large part because Wall Street is expecting the economy to pull off a delicate balancing act: slowing enough to convince the Federal Reserve to cut interest rates, but not so much that it causes a recession, all while inflation remains under control.
Many things must go right for that to happen, and an encouraging signal came from a report Wednesday saying inflation at the U.S. wholesale level unexpectedly slowed in August.
A potentially more important report is coming Thursday, which will show how bad inflation has been for U.S. households.
Traders were already convinced the Fed will deliver its first cut to interest rates of the year at its next meeting, but they need inflation data until then to be mild enough not to derail those expectations.
On Wall Street, tech stocks led the way after Oracle said AI-related demand is set to send its revenue surging. Oracle stock leaped 35.9% for its best day since 1992, even though it also reported results for the latest quarter that came up just shy of analysts’ expectations.
Taiwan Semiconductor Manufacturing Co., which makes chips used in AI and other computing, saw its stock that trades in the U.S. climb 3.8% after it said its revenue jumped nearly 34% in August from a year earlier.
On the losing side of Wall Street was Apple, whose drop of 3.2% helped drag the Dow lower and was the heaviest single weight on the S&P 500. Some analysts said its unveiling of new iPhones the day before contained no surprises and may not drive much growth in demand.
In other dealings Thursday, benchmark U.S. crude shed 11 cents to $63.56 per barrel. Brent crude, the international standard, lost 8 cents to $67.41 per barrel.
The U.S. dollar rose to 147.88 yen from 147.36 yen. The euro slid to $1.1687 from $1.1704.
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AP Business Writers Stan Choe in New York contributed to this report.
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Labor Department watchdog launches probe into the Bureau of Labor Statistics
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The Department of Labor’s internal watchdog is launching a review of the Bureau of Labor Statistics’ (BLS) approach to collecting and reporting economic data.
Laura Nicolosi, assistant inspector general for audit in the Labor Department’s Office of Inspector General, said in a September 10 letter to acting BLS commissioner William Wiatrowski that the watchdog will examine how the statistics bureau compiles and reports monthly inflation and jobs data.
In the letter, Nicolosi pointed to the Labor Department recently announcing large downward revisions to its earlier estimates of payroll gains. BLS released figures on Tuesday showing that the U.S. labor market added more than 900,000 fewer jobs in the 12-month period ending March 2025 than had earlier been reported.
The BLS produces its monthly employment report by conducting separate surveys of households and businesses. The Labor Department also taps other measures of how the job market is faring, including state unemployment claims. The Labor Department frequently issues revisions to figures from prior months as more complete or accurate data is collected over time.
The internal review of BLS’ methods also will examine how it collects, reports and revises data used in two closely watched gauges of inflation — the Producer Price Index and the Consumer Price Index — Nicolosi said. Recent data show that inflation around the U.S. has risen this year.
President Trump last month fired then BLS commissioner Erika McEntarfer and accused her of political bias after the Labor Department’s July employment report showed unexpectedly weak job growth and revised down payroll gains for the previous two months.
“I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified. Important numbers like this must be fair and accurate, they can’t be manipulated for political purposes,” the president wrote in an August 1 post on social media.
The White House directed questions about the probe to the Labor Department, which didn’t immediately respond to a request for comment.
A spokesperson for the OIG said the office is not able to provide any comments or release any information beyond what is available on its website.
McEntarfer has defended BLS’ data collection efforts. In a social media post on Tuesday, she said the bureau is filled with “dedicated statisticians and public servants working tirelessly to improve economic data in a climate of budgetary cuts to data collection.”
Mr. Trump’s move to oust McEntarfer and question the accuracy of federal labor data has sparked concern among economists and policymakers.
“If trust in official statistics is lost, financial markets and the U.S. economy could face serious consequences: heightened volatility, reduced business investment, higher borrowing costs and slower growth,” the National Association of Business Economists said in a statement this week expressing support for BLS. “The consequences would ripple through households, businesses and global markets.”
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Inflation is creeping higher, with some Americans saying they’re squeezed: “It’s really challenging”
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For Kasey McBlais, a 42-year-old single mom who lives in Maine with her two elementary school-aged children, the cost of running a household is only getting more expensive, from buying groceries to paying for her home’s upkeep.
“It’s really challenging,” McBlais, who works at a nonprofit, says of managing her expenses. “It’s paycheck to paycheck.”
Cleaning her chimney cost $500 this year, up from about $200 when she bought her house in 2019. And grocery money isn’t going as far either, prompting McBlais to stretch meals to make sure the family has leftovers. “I honestly don’t expect anything to go back to the way they were — it’s a matter of things leveling off where they are at,” she said.
McBlais’ concerns and struggles come as the pace of inflation continues to creep higher, remaining well above the Federal Reserve’s goal of driving it down to an annual 2% rate. The situation is leaving some consumers feeling frustrated by stubbornly high prices on everything from groceries to housing, souring their views about the health of the U.S. economy.
In a recent CBS News poll, two-thirds of Americans said that prices in the past few weeks have continued to rise, with nearly all saying they expect the rise in costs to continue.
On Thursday, the Consumer Price Index is expected to show that prices rose at an annualized rate of 2.9% in August, up from 2.7% in July. Some economists point to the Trump administration’s tariffs as a contributing factor.
“Tariffs will raise prices, and that does of course lead to inflation — there’s no way around that,” said Erasmus Kersting, an economics professor at the Villanova School of Business.
To be sure, inflation is well below its pandemic peak. But the Federal Reserve’s progress has been slipping, with recent CPI data showing price growth picking up again after reaching a low point this spring.
At the same time, President Trump is pushing the Federal Reserve to cut its benchmark rate, posting on social media on Wednesday that there is “no inflation!!!” He also urged the Fed to “lower the RATE, BIG, right now.”
In July 2024, when Mr. Trump pledged to end the “inflation nightmare,” the CPI rate stood at 2.9%, or the same pace that economists forecast for tomorrow’s report.
“The president would like people to stop paying attention to inflation now because it’s not helping it,” Kersting noted. “In the past he wanted people to pay attention to it, because back then it did help him win the election.”
Asked for comment on forecasts the CPI will show an uptick in inflation, the White House said the president is delivering on his promises.
“Joe Biden unleashed the worst inflation crisis in nearly four years — President Trump ended it. Despite the media’s false narrative, core inflation has run at a 2.4% average pace since President Trump took office which is the lowest 6-month pace since March 2021. The so-called ‘experts’ have been wrong month after month: tariffs have not hiked prices and President Trump is delivering on his promise to make America affordable again,” White House spokeswoman Taylor Rogers told CBS MoneyWatch.
The Federal Reserve’s complicated decision
A hotter CPI report would complicate the Federal Reserve’s task of deciding its next interest rate move on Sept. 17, given that the labor market has stalled out this summer. The Fed’s so-called “dual mandate” requires it to promote full employment while keeping inflation in check.
So far in 2025, the Fed has held its benchmark rate steady, with Chair Jerome Powell saying he wanted to keep the central bank’s powder dry in case tariffs caused inflation to reignite. Because rate reductions make it cheaper to borrow, they can spur businesses and consumers to open their wallets, adding to inflationary pressures.
But two consecutive disappointing jobs reports signal that the labor market is stalling out, putting pressure on the Fed to cut rates, which can help bolster hiring by making it cheaper for businesses to borrow and add more workers. Powell last month signaled the Fed may be open to a cut, pointing to the labor market’s risks.
The probability of a 0.25 percentage point rate cut is pegged at 90% by CME FedWatch, which bases its forecast on 30-day Fed Funds futures prices. There’s a slimmer 10% likelihood that the Fed could usher in a jumbo cut of 0.5 percentage points, its data shows.
A rate cut could help some consumers by lowering their borrowing costs, with interest fees on credit cards, home equity lines of credit and other loans likely to drop after a reduction. But households are still continuing to face higher prices at the grocery store and for household bills, experts note.
“Budget pressure has never fully let up for many households, even as inflation subsided during 2024 and early 2025,” Stephen Kates, a certified financial planner and Bankrate financial analyst, said in an email. “Current and future inflation expectations feel like a slow, painful walk down memory lane.”
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Labor Department watchdog to audit jobs and inflation reports from embattled BLS
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A government watchdog says it will review how a Labor Department agency compiles and reports some of the nation’s highest profile economic data, just two days after the agency made a sharp downward revision in its estimate of the number of jobs
WASHINGTON — A government watchdog says it will review how a Labor Department agency compiles and reports some of the nation’s highest profile economic data, just two days after the agency made a sharp downward revision in its estimate of the number of jobs.
A spokesperson for the department’s Office of the Inspector General said Wednesday that it is launching a review of “the challenges that Bureau of Labor Statistics encounters collecting and reporting closely watched economic data.”
The audit will focus on the agency’s reports on inflation and employment, a Wednesday letter to BLS acting commissioner William Wiatrowski said. Both reports are considered definitive measures of those two key aspects of the U.S. economy. The letter was from Laura Nicolosi, assistant inspector general for audit at the Labor Department’s inspector general.
The audit is the latest example of increasing scrutiny of the BLS as its recent jobs reports have shown a sharp slowdown in hiring over the summer. The agency has also made steep downward revisions in previously-published estimates of jobs and hiring, causing President Donald Trump to denounce the agency and to fire its commissioner last month.
On Tuesday, the BLS released annual revisions to its employment figures that showed there were 911,000 fewer jobs created in the year ending in March 2025, a deep reduction that suggested the job market was much weaker in 2024 and earlier this year than previously thought.
The initial data is compiled based on surveys of about 120,000 companies, and the revisions are then made based on actual job rolls employers then submit quarterly to state unemployment tax offices.
U.S. government statistical agencies have seen an inflation-adjusted 16% drop in funding since 2009, according to a July report from the American Statistical Association.
The large downward revision has increased pressure on the Federal Reserve to reduce its key interest rate, in hopes that cheaper borrowing costs will help revive the growth and job gains.
“This is exactly why we need new leadership to restore trust and confidence in the BLS’s data on behalf of the financial markets, businesses, policymakers, and families that rely on this data to make major decisions,” White House press secretary Karoline Leavitt said Tuesday.
Trump has nominated E.J. Antoni, chief economist at the conservative Heritage Foundation, to be the next commissioner of the BLS.
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See how your cost of living has changed with the ABC Price Tracker
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The app includes prices for many of your basic needs, from food to housing to transportation, spanning a decade of data points.
Tuesday, September 9, 2025 3:00PM
The ABC Data Team has launched the Price Tracker, an interactive tool that provides up-to-date information on the price of household necessities in your area.
It displays regional prices of essentials for the 100 largest U.S. metro areas over the last decade. Simply search for your area to see how the cost of living has changed for households like yours. Then select groceries, housing or utilities to drill down into each category of basic expenses.
The ABC Price Tracker can help you answer questions like:
- How have rent and other housing expenses changed over the last 10 years?
- Which grocery items have seen the biggest price hikes nationwide?
- When was the last time gas cost less than $3 per gallon in my area?
The interactive tool will automatically update with the latest data available, so you can give your sticker shock a gut check.
Go here to use the ABC Price Tracker.
Copyright © 2025 KABC Television, LLC. All rights reserved.
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Dow futures rise as recession fears grow while Wall Street awaits the one thing that could derail Fed rate cuts
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Stock futures gained momentum on Sunday evening as investors brace for fresh inflation data and political turmoil overseas that could ripple through the bond market.
That comes as Friday’s dismal jobs report ratcheted up recession fears while also locking in odds for a rate cut later this month from the Federal Reserve.
Futures tied to the Dow Jones Industrial Average rose 94 points, or 0.21%. S&P 500 futures were up 0.23%, and Nasdaq futures added 0.38%.
The yield on the 10-year Treasury was flat at 4.091%. The U.S. dollar was up 0.05% against the euro and up 0.65% against the yen after Japan’s prime minister announced he will step down after less than a year in office.
More political turmoil in the world fourth-largest economy could rattle the bond market as investors gauge whether the next leader will lean toward fiscal discipline or more profligacy.
Similarly, France’s government faces a confidence vote on Monday after bond vigilantes sent French yields higher on expectations for more gridlock and no progress on reining in deficits.
U.S. oil prices rose 0.32% to $62.07 per barrel, and Brent crude added 0.40% to $65.76. That’s despite key OPEC+ members agreeing on another production hike meant to grab more market share.
Gold fell 0.64% to $3,630 per ounce, but still hovering near record highs after recession fears sent safe-haven assets higher last week.
More recession signals were lurking in the latest jobs data. On Sunday, Moody’s Analytics chief economist Mark Zandi point out that most U.S. industries have been shedding jobs rather than adding them for several months, warning that “this only happens when the economy is in recession.”
Such labor market weakness basically guaranteed a Fed rate cut. According to CME’s FedWatch tool, Wall Street is certain that some kind of cut is coming when the central bank announces its policy decision on Sept. 17. The only question is whether it will be 25 basis points or 50 basis points. Right now, a 92% probability of a quarter-point cut is priced in.
Perhaps the only thing that could put a rate cut in doubt is a surprise spike in inflation. The effect of President Donald Trump’s tariffs on inflation has been more muted that anticipated, but investors will get crucial updates.
On Wednesday, the producer price index for August will come out, and economists expect a 0.3% month increase, cooling from the 0.9% surge in July.
On Thursday, the consumer price index is due, and Wall Street sees a 0.3% gain, accelerating from the 0.2% pace a month earlier. On an annual basis, the CPI is also seen heating up, with August expected to see a yearly pace of 2.9%, up from 2.7% in July.
But inflation in core consumer prices should remain steady at a monthly rate of 0.3% and an annual rate of 3.1%. Still, both the headline CPI and core CPI would continue to be above the Fed’s 2% target.
On Tuesday, the Labor Department will publish preliminary benchmark revisions to its establishment survey data for 2025. With revisions earlier this year mostly trimming prior readings, more downward revisions could be due.
Meanwhile, Fed Governor Lisa Cook is fighting Trump’s attempt to fire her, and a judge hearing the case could issue a ruling in the coming week, clarifying whether she will be able to participate in the FOMC meeting.
In addition, the Senate could vote on Trump’s nomination of White House economic adviser Stephen Miran to the Fed’s board of governors, allowing him to take part in the meeting.
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Jason Ma
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The Fed got it wrong and is late again, top economist says, as job gains collapse
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Allianz chief economic advisor Mohamed El-Erian said the Federal Reserve is behind the curve in lowering rates now that the economy is slowing, just as it was tardy in hiking rates when inflation was spiking.
The latest jobs report revealed the U.S. economy added just 22,000 jobs in August with revisions to prior months showing June actually saw a decline. Meanwhile, the unemployment rate edged up to a four-year high of 4.3%.
“I think they have gotten it wrong,” he told CNBC on Friday. “I think once again they’re late. They will cut in September, and I suspect there will also be discussion should they cut by 25 or 50” basis points.
That would mark another policy mistake in recent years. As the economy began to recover from the COVID-19 pandemic, prices began surging, but the Fed was slow to hike rates. When it finally started in 2022, it launched the most aggressive tightening cycle in four decades, though the economy didn’t tip into a recession as was widely expected.
El-Erian’s remarks echo President Donald Trump’s criticism of the central bank. Trump has regularly insulted Chairman Jerome Powell, and even toyed with firing him earlier this year. Meanwhile, he has moved to fire Fed Governor Lisa Cook, who is fighting her dismissal in court.
The Fed should’ve cut rates in July, but Powell’s view of the job market was too narrow and ignored the weakness that was building under the surface, El-Erian said.
The risk with waiting to provide support to a weakening labor market is that it can deteriorate in a “nonlinear” fashion, meaning that job losses can quickly accelerate, he explained.
For his part, Powell has pointed to the unemployment rate, which has been relatively steady for more than year, noting that the supply of workers in the labor market has dropped alongside a decline in demand.
Trump’s immigration crackdown has sent more than 1 million workers out of the labor force this year. As a result, the breakeven level of job gains that are needed to keep unemployment flat is lower than it used to be.
At the same time, Fed’s dual mandate of price stability and maximum employment is forcing policymakers to balance the risks of further stoking inflation, which has been climbing as Trump’s tariffs ripple through the supply chain.
Tariffs are also weighing on the job market. In a note on Saturday, Torsten Sløk, chief economist at Apollo Global Management, observed that job growth in tariff-impacted sectors is negative, while sectors not directly impacted by tariffs are declining but still in positive territory.
There’s still time for the Fed to correct its mistake, and perhaps cut rates more aggressively, El Erian said. But the risks to the economy are elevated as lower-income households have seen their financial security decline.
“Could they play catch-up? Yes, they could. Hopefully they will, but it’s a more risky operation than a lot of people expect it to be,” he warned.
It’s also not certain the Fed can actually save the economy. Moody’s Analytics chief economist Mark Zandi previously warned that with inflation still climbing, the central bank will have a hard time coming to the rescue with a steep easing cycle.
Similarly, JPMorgan Asset Management chief global strategist David Kelly said rate cuts will reduce interest income for retirees and encourage businesses to hold off on borrowing money and wait for rates to get even lower.
“The whole history of the 21st century is rate cuts don’t stimulate growth,” he told CNBC on Friday. “They didn’t any in any way after the Great Financial Crisis. So don’t look to the Fed to bail out the economy.”
On top of that, lower cuts could also raise fears that the reason the Fed is cutting because it sees a recession on the horizon, Kelly added.
Combined with existing uncertainty over Trump’s tariffs and immigration crackdown, recession fears could act as another drag on the economy, he explained, noting that “the biggest tax the government levies is an uncertainty tax.”
“There is a level of uncertainty here which is just causing people to freeze, and that’s really what you see in the hiring numbers,” Kelly said. “That’s the problem. Businesses aren’t laying off thousands and thousands. They’re just waiting to see, and the three most deadly words in economics are ‘wait and see.’ But when everybody decides to wait and see, what you see is not good.”
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Trump’s job market promises fall flat as hiring collapses and inflation ticks up
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WASHINGTON — The U.S. job market has gone from healthy to lethargic during President Donald Trump’s first seven months back in the White House, as hiring has collapsed and inflation has started to climb once again as his tariffs take hold.
Friday’s jobs report showed employers added a mere 22,000 jobs in August, as the unemployment rate ticked up to 4.3%. Factories and construction firms shed workers. Revisions showed the economy lost 13,000 jobs in June, the first monthly losses since December 2020, during the COVID-19 pandemic.
The new data exposed the widening gap between the booming economy Trump promised and the more anemic reality of what he’s managed to deliver so far. The White House prides itself on operating at a breakneck speed, but it’s now asking the American people for patience, with Trump saying better job numbers might be a year away.
“We’re going to win like you’ve never seen,” Trump said Friday. “Wait until these factories start to open up that are being built all over the country, you’re going to see things happen in this country that nobody expects.”
The plea for patience has done little to comfort Americans, as economic issues that had been a strength for Trump for a decade have evolved into a persistent weakness. Approval of Trump’s economic leadership hit 56% in early 2020 during his first term, but that figure was 38% in July of this year, according to polling by The Associated Press-NORC Center for Public Affairs Research.
The situation has left Trump searching for others to blame, while Democrats say the problem begins and ends with him.
Trump maintained Friday that the economy would be adding jobs if Federal Reserve Chair Jerome Powell had slashed benchmark interest rates, even though doing so to the degree that Trump wants could ignite higher inflation. Investors expect a rate cut by the Fed at its next meeting in September, although that’s partially because of weakening job numbers.
Senate Minority Leader Chuck Schumer, D-N.Y., said Trump’s tariffs and freewheeling policies were breaking the economy and the jobs report proved it.
“This is a blaring red light warning to the entire country that Donald Trump is squeezing the life out of our economy,” Schumer said.
By many measures, Trump has dug himself into a hole on the economy as its performance has yet to come anywhere close to his hype.
— Trump in 2024 suggested that deporting immigrants in the country illegally would protect “Black jobs.” But the Black unemployment rate has climbed to 7.5%, the highest since October 2021, as the Trump administration has engaged in aggressive crackdowns on immigration.
— At his April tariffs announcement, Trump said, “Jobs and factories will come roaring back into our country and you see it happening already.” Since April, manufacturers have cut 42,000 jobs and builders have downsized by 8,000.
— Trump said in his inaugural address that the “liquid gold” of oil would make the nation wealthy as he pivoted the economy to fossil fuels. But the logging and mining sectors — which includes oil and natural gas — have shed 12,000 jobs since January. While gasoline prices are lower, the Energy Information Administration in August estimated that crude oil production, the source of the wealth promised by Trump, would fall next year by an average of 100,000 barrels a day.
— At 2024 rallies, Trump promised to “end” inflation on “day one” and halve electricity prices within 12 months. Consumer prices have climbed from a 2.3% annual increase in April to 2.7% in July. Electricity costs are up 4.6% so far this year.
The Trump White House maintains that the economy is on the cusp of breakout growth, with its new import taxes poised to raise hundreds of billions of dollars annually if they can withstand court challenges.
At a Thursday night dinner with executives and founders from companies including Apple, Google, Microsoft, OpenAI and Meta, Trump said the facilities being built to develop artificial intelligence would deliver “jobs numbers like our country has never seen before” at some point “a year from now.”
But Michael Strain, director of economic policy studies at the American Enterprise Institute, noted that Trump’s promise that strong job growth is ahead contradicts his unsubstantiated claims that recent jobs data was faked to embarrass him. That accusation prompted him to fire the head of the Bureau of Labor Statistics last month after the massive downward revisions in the July jobs report.
Strain said it’s rational for the administration to say better times are coming, but doing so seems to undermine Trump’s allegations that the numbers are rigged.
“The president clearly stated that the data were not trustworthy and that the weakness in the data was the product of anti-Trump manipulation,” Strain said. “And if that’s true, what are we being patient about?”
The White House maintained that Friday’s jobs report was an outlier in an otherwise good economy.
Kevin Hassett, director of the White House National Economic Council, said the Atlanta Federal Reserve is expecting annualized growth of 3% this quarter, which he said would be more consistent with monthly job gains of 100,000.
Hassett said inflation is low, income growth is “solid” and new investments in assets such as buildings and equipment will ultimately boost hiring.
But Daniel Hornung, who was deputy director of the National Economic Council in the Biden White House, said he didn’t see evidence of a coming rebound in the August jobs data.
“Pretty broad based weakening,” Hornung said. “The decline over three months in goods producing sectors like construction and manufacturing is particularly notable. There were already headwinds there and tariffs are likely exacerbating challenges.”
Stephen Moore, an economics fellow at the conservative Heritage Foundation and supporter of the president, said the labor market is “definitely softening,” even as he echoed Trump’s claims that the jobs numbers are not reliable.
He said the economy was adjusting to the Trumpian shift of higher tariffs and immigration reductions that could lower the pool of available workers.
“The problem going forward is a shortage or workers, not a shortage of jobs,” Moore said. “In some ways, that’s a good problem to have.”
But political consultant and pollster Frank Luntz took the contrarian view that the jobs report won’t ultimately matter for the political fortunes of Trump and his movement because voters care more about inflation and affordability.
“That’s what the public is watching, that’s what the public cares about,” Luntz said. “Everyone who wants a job has a job, for the most part.”
From the perspective of elections, Trump still has roughly a year to demonstrate progress on improving affordability, Luntz said. Voters will generally lock in their opinions about the economy by Labor Day before the midterm elections next year.
In other words, Trump still has time.
“It’s still up for grabs,” he said. “The deciding point will come Labor Day of 2026.”
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The August jobs report has economists alarmed. Here are their 3 top takeaways.
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Many economists say Friday’s disappointing jobs report is sending warning signals about the pace of hiring across the U.S. and the broader health of the economy.
Employers added only 22,000 nonfarm jobs in August, far short of Wall Street analyst forecasts of 80,000, while the nation’s unemployment rate rose to 4.3% — the highest level since October of 2021, when the economy was still reeling from the effects of the pandemic. In 2024, the economy added an average of 168,000 per month, labor data shows.
The job market is faltering partly because of the Trump administration’s tariffs, which are heightening economic uncertainty, boosting costs for importers and complicating business planning.. Some economists also think that rapid employer adoption of artificial intelligence is hurting demand for recent college graduates and other entry-level workers, although there is ongoing debate among researchers about how much AI is affecting job growth.
“Uncertainty makes it very, very difficult for people in companies to make decisions,” Laura Ullrich, director of economic research for North America at job-search firm Indeed and a former official at the Federal Reserve Bank of Richmond, told CBS MoneyWatch. “My former boss says that when you are driving through fog, you slow down — but if it gets thick enough, you pull over.”
The Trump administration defended its trade and other economic policies, expressing confidence they will eventually drive growth.
“President Trump’s trade deals have unlocked unprecedented market access for American exports to economies that in total are worth over $32 trillion with 1.2 billion people,” White House spokesman Kush Desai said in a statement to CBS MoneyWatch. “As these unprecedented trade deals and the administration’s pro-growth domestic agenda of deregulation and historic working-class tax cuts take effect, American businesses and families alike have the certainty that the best is yet to come.”
In response to the jobs report, President Trump on Friday posted on social media that Federal Reserve Chair Jerome Powell should have moved sooner to cut interest rates. Lower borrowing costs can stimulate job growth by driving consumer spending and making it cheaper for businesses to expand their operations.
“Jerome ‘Too Late’ Powell should have lowered rates long ago. As usual, he’s ‘Too Late!’,” the president wrote.
Here are three key takeaways from economists about the latest employment figures.
The job market is stalling
Overall hiring in August was far weaker than economists expected. More troubling, the numbers look considerably worse after stripping out the two sectors that showed some of the strongest growth in August — health care and social assistance. Health care companies created 31,000 new jobs last month, while social assistance — employers such as food banks and those providing services for disabled people, children and low-income families — added 16,000 new jobs.
But many other sectors had stagnant or even declining job growth, such as manufacturing, which shed 12,000 jobs in August, and professional and business services, which lost 17,000.
“Absent the secular gains in health care and social assistance, the cyclical categories of the private service sector (excluding health care and social assistance) have collectively turned negative on average in the past four months,” Nationwide chief economist Kathy Bostjancic said in a report Friday.
Hiring this summer was also weaker than previously thought. The Labor Department’s latest data shows employers cut 13,000 jobs in June, rather than adding 14,000 new hires as the agency had reported in its first estimate for that month. The June drop marks the first decline in monthly jobs since late 2020.
Although July payroll gains were revised up slightly, total job growth for June and July was 21,000 lower than previously reported, according to the Labor Department.
Job growth is at its lowest level in 15 years
The average monthly job gains since January represent the fewest jobs added over the first eight months of the year in 15 years, excluding the pandemic-triggered crisis period of 2020, Indeed’s Ullrich noted.
“We haven’t added this few jobs since 2010, and we have 17 million more people in the labor market than we did then,” she said. “That, to me, is a staggering headline.”
That loss of momentum in creating new jobs is raising concerns about the overall strength of the economy. The nation’s gross domestic product — the total value of goods and services — is expanding more slowly than in 2024, while inflation remains above the Federal Reserve’s annual growth target of 2%.
That combination has caused some economists to warn about the risk of the U.S. entering a period of “stagflation,” a toxic mix of high prices and weak growth. Forecasters expect Consumer Price Index data for August, which is set to be released next week, to show inflation rising at an annual rate of 2.9%, according to financial data firm FactSet.
“Concerns about the health of the economy are starting to creep in,” Seema Shah, chief global strategist at Principal Asset Management, said in an email. “Equally, a strong inflation print next week could strike new fears about a stagflationary mix.”
The Fed is highly likely to cut interest rates this month
Across the board, economists on Friday said the subpar August jobs report virtually locks in a Federal Reserve interest-rate cut when policymakers meet on Sept. 17. The question is by how much.
August hiring was so anemic that some economists now think the Fed could opt for a 0.5 percentage point cut — double the typical rate cut — in a bid to keep the job market on track. Traders now see a 10% chance of a jumbo cut and a 90% likelihood of a 0.25 percentage point reduction, according to CME FedWatch. Prior to Friday’s jobs report, the market was completely discounting a jumbo cut, the tool shows.
Some economists also think the Fed will continue trimming rates later in 2025 to counter the weak job market.
“With the weak job growth, the Fed is cleared to cut rates in September. The question is whether we get [0.25 or 0.50 percentage points],” Scott Helfstein, Global X’s head of investment strategy, said in an email. “We continue to believe the Fed will ease into the cutting cycle here with one rather than two, but there is some latitude here.”
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Trump says grocery, energy prices are down. Many aren’t
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One of the biggest talking points of Donald Trump’s 2024 presidential campaign was to reverse the high inflation that peaked in 2022 under former President Joe Biden. Trump promised to reduce prices for groceries, cars and other consumer items.
Trump took a victory lap on prices during an Aug. 26 Cabinet meeting, calling out a few categories.
“Groceries are down. Energy is way down,” Trump said. “Was $4 and $5 for a gallon of gas.”
We looked at official government data and found that the cost of some grocery and energy products have gone down, but many have seen increases.
The White House did not respond to an inquiry for this article.
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Food prices are up, with a few exceptions
For groceries, we examined standard price data from the Bureau of Labor Statistics’ consumer price index. Taken as a whole, the cost of food has risen, but some individual items have fallen in price as others rose.
A measure for groceries, called food at home, rose by a small amount between December 2024 and July 2025 — just under 1%.
Combining food and beverage prices shows a rise of 1.5% during the same period.
The Bureau of Labor Statistics also separates price patterns for key types of food. A deeper dive into the grocery cart shows that some of these items became more expensive while others became cheaper.
The price of eggs, an issue Trump spotlighted earlier in the year, has fallen by about 13%, following a bird flu-driven spike.
Bread fell by 3.2%, and fruits and vegetables fell by 0.7%.
But a larger number of items increased in price. Bacon rose by 2.9%. The combined cost of meats, poultry, fish and eggs rose by 2.8%. Coffee prices rose by 11.3%. Dairy and related products rose slightly, by 0.5%. Sugar and sweets rose by 3.7%.
Ground beef saw the biggest increase, rising by 11.6%. Drought and export limits have driven beef prices higher.
These increases are over half a year. If these items’ prices continue to rise at the same rate over a full year, the percentage increase would double.
Energy prices overall are down, but electricity is up
The overall cost of energy is down, by about 2.6% on Trump’s watch. Energy is a broad field that includes fuel oil, propane, kerosene, firewood, electricity and energy services.
Many consumers have noticed that their monthly electricity bills are up, by 4.6%.
Gasoline prices, according to the Energy Information Administration, rose by just a few cents from $3.109 on Jan. 20, Trump’s inauguration day, to $3.147 on Aug. 25, the most recent data available when Trump spoke. (Gas prices are typically higher in the summer.)
Trump compares this with $4 or $5 per gallon gasoline, but the last time prices were that high was in 2022. Most, and most of the subsequent price decline came under Biden. Gasoline prices were below $4 per gallon for the final two and a half years of Biden’s presidency.
Trump “can point to successes in lowering inflation in some commodities; but there have been ‘failures’ in many other commodities,” said Gary Burtless, a Brookings Institution economist. “Overall, it’s hard to say that inflation is sharply or even moderately lower than it was in the late-Biden-administration era.”
Our ruling
Trump said, “Groceries are down. Energy is way down. … Was $4 and $5 for a gallon of gas.”
Some food items have seen a price decline on Trump’s watch, and overall energy prices have declined. But many items have increased in price.
Among the food items to rise in price between December 2024 and July 2025 are ground beef, bacon, other meats, coffee, dairy products and sugar and sweets.
As for energy, electricity costs have risen, and Trump’s comparison to $4 and $5 gasoline ignores that most of the price decline at the pump occurred under Biden.
We rate the statement Half True.
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Higher inflation and unemployment cast shadow over Europe’s biggest economy
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A vendor gives a customer change at stall at a farmers market in Hanau, Germany, on Saturday, Aug. 9, 2025.
Alex Kraus | Bloomberg | Getty Images
Increases in unemployment and inflation cast a shadow over the outlook for Europe’s largest economy, which joins the wider EU bloc in bracing for the full impact of newly implemented U.S. tariffs.
German inflation rose by a higher-than-expected 2.1% in August, preliminary data showed Friday, exceeding the 2% expectations of analysts polled by Reuters. Inflation, which is harmonized for comparability across the euro zone, had risen by a cooler-than-expected 1.8% in July.
Germany’s core inflation, which excludes food and energy prices, was unchanged from the previous month at 2.7% in August, the country’s statistics office Destatis said.
Yields on German government bonds, known as Bunds, were little changed shortly after the data release, which came on the same day that labor office figures showed the number of unemployed people jumped to 3.025 million in August, to a rate of 6.4%.
The broader euro zone inflation reading, due Tuesday, will offer further insight into the economic impact of U.S. President Donald Trump’s tariff policies, which have hit various European sectors in recent months.
The U.S. and EU struck a trade agreement in July, including a 15% tariff rate on many EU goods exported to the U.S. Fresh details released earlier this month suggested that this blanket rate will also be applied to some hotly contested sectors like pharmaceuticals — but crucial questions still remain unanswered, leaving businesses on edge.
The tariffs are widely expected to drive prices higher in the U.S., but their effect on costs elsewhere is less clear.
Germany’s highly export-driven economy has long been hovering near the flatline. The country’s gross domestic product expanded by 0.3% in the first quarter, before contracting by 0.3% in the following period, according to the latest data from Destatis.
“It remains to be seen how European and US companies will react to US tariffs. While one scenario could see prices falling in the eurozone due to overcapacity and weaker sales in the US, globally operating companies might try to actually increase prices in Europe in order to offset profit-squeezing in the US,” said Carsten Brzeski, global head of macro at ING, in a note.
“A rather domestic theme will be the cooling of the German labour market, which should take away wage pressures and consequently inflationary pressures,” he added, noting that the inflationary hike in Germany now weakens the case for the European Central Bank to press ahead with an interest rate cut at its September meeting.
The ECB most recently opted to hold its key rate unchanged at 2% during its July meeting.
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Core inflation rose to 2.9% in July, highest since February
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Inflation edged higher in July, according to the Federal Reserve‘s preferred inflation measure, indicating that President Donald Trump‘s tariffs are working their way through the U.S. economy.
The personal consumption expenditures price index showed that core inflation, which excludes food and energy costs, ran at a 2.9% seasonally adjusted annual rate, according to a Commerce Department report Friday. That was up 0.1 percentage point from the June level and the highest annual rate since February, though in line with the Dow Jones consensus forecast.
On a monthly basis, the core PCE index increased 0.3%, also in line with expectations. The all-items index showed the annual rate at 2.6% and the monthly gain at 0.2%, also hitting the consensus outlook.
The Fed uses the PCE price index as its primary forecasting tool. Though it watches both numbers, policymakers consider core inflation to be a better indicator of longer-term trends as it excludes the volatile gas and groceries figures.
Central bankers target inflation at 2%, so Friday’s report shows the economy still a distance from where the Fed feels comfortable.
Nevertheless, markets expect the Fed to resume lowering its benchmark interest rate when policymakers convene next month. Fed Governor Christopher Waller reiterated his support for a cut in a speech Thursday, saying he would entertain a larger move if labor market data continue weakening.
“The Fed opened the door to rate cuts, but the size of that opening is going to depend on whether labor-market weakness continues to look like a bigger risk than rising inflation,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. “Today’s in-line PCE Price Index will keep the focus on the jobs market. For now, the odds still favor a September cut.”
Trump in April imposed a baseline 10% tariff on all imports and since has leveled so-called reciprocal tariffs on multiple trading partners and slapped duties in individual goods as well. In addition, the White House has scrapped exceptions for goods under $800.
Along with the inflation moves, consumer spending increased 0.5% on the month, in line with forecasts and indicative of strength despite the higher prices. Personal income accelerated 0.4%, rounding out a report that saw all figures hit the consensus outlook.
Stock market futures remained negative after the release while Treasury yields held gains.
Inflation numbers were held in check by a 2.7% annual decline in prices for energy goods and services. Food prices rose 1.9% from a year ago. The balance also tilted heavily toward services prices, which jumped 3.6%, compared with just a 0.5% increase in goods.
On a monthly basis, energy was off 1.1% and food was down 0.1%. Services prices rose 0.3%, essentially accounting for all the monthly increase as goods decreased 0.1%.
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The government’s next jobs report lands Friday. Here’s what to look for.
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When President Trump last month fired the head of the federal bureau that produces the government’s monthly jobs report after the numbers pointed to a slump in U.S. hiring, he drew rebukes from critics who accused him of politicizing a technical — and nonpartisan — data collection process.
On Friday, the Labor Department is set to release employment figures for August in what could emerge as another possible flashpoint.
The new payroll report comes at a critical juncture for the economy. Recent data suggests the labor market is cooling, a particular concern as workers and businesses head into the crucial holiday spending period. The Federal Reserve later this month is also expected to cut its benchmark interest rate for the first time since December 2024 as it swivels from fighting inflation to shoring up job growth.
Meanwhile, the August employment report will be the first since Mr. Trump ordered the dismissal of former Bureau of Labor Statistics Commissioner Erika McEntarfer and questioned the Labor Department’s competence in tracking the rate of job-creation across the U.S.
In the aftermath, economists expressed concern that Mr. Trump’s move could undermine confidence in the accuracy of U.S. economic data — a benchmark for the global economy. Any further actions by the Trump administration to question the accuracy of the monthly jobs data could sow further doubt about its validity, Gregory Daco, chief economist at strategy consulting firm EY-Parthenon, told CBS MoneyWatch.
What happened last month
Employers added only 73,000 jobs in July, the government reported last month — a figure that fell far short of economist forecasts and that led Mr. Trump to express “shock” over what appeared to be a sudden downturn in hiring. Also troubling was that the Labor Department sharply revised down how many jobs the economy added in May and June, a sign the economy was weaker than previously thought.
Such revisions are common, according to economists. The U.S. has roughly 160 million workers, making it impossible for the Bureau of Labor Statistics to tally each job every month. Instead, Labor Department staff draws on available data to estimate hiring and layoffs, while also revising their estimates for seasonal factors.
Still, the Labor Department’s July recalculation of the pace of job growth was noteworthy for its scale, representing the largest two-month downward revision since 1968.
“The previous report was obviously shocking in the sense of the downward revisions for the previous two months, and really caused a reckoning in the sense of needing to view hiring in a new light — and obviously not in a positive light,” Mark Hamrick, senior economic analyst at Bankrate, told CBS MoneyWatch.
Indeed, the disappointing numbers were the clearest sign to date this year that the job market could be starting to sputter as the impact of the Trump administration’s tariffs and general economic uncertainty weigh on employers.
What to expect from the August job numbers — and beyond
The August jobs data will provide a crucial measure of whether the labor market is holding up or running out of steam, as recent data suggests. The year started off strong, with an average monthly payroll gain of 123,000 from January to April — well above the number required to keep the nation’s unemployment rate, now at 4.2%, from rising.
However, the job market has stalled in recent months, with an average payroll gain from May to July of only 35,000. For the first time since April of 2021, the U.S. now has more unemployed people, at 7.24 million, than the 7.18 million jobs open around the country, according to labor data released on Wednesday.
“This is yet another data point underscoring how this job market is frozen, and it’s difficult for anyone to get a job right now,” Heather Long, chief economist at Navy Federal Credit Union, said in an email. “This is a turning point for the labor market. It’s yet another crack.”
Economists polled by financial data firm FactSet projected that employers added 80,000 jobs in August, with the unemployment rate expected to hold steady at 4.2%. A figure around or exceeding that level would alleviate fears that the job market is cratering.
Daco, who forecasts a much more moderate gain of 40,000 jobs in August, said in a research note this week that the employment report on Friday is “likely to confirm that a marked slowdown in labor market conditions is underway.”
Another important marker to look for in the latest job figures will be whether the Labor Department revises the payroll gains for July, as it did for May and June.
“Since every month in 2025 has been revised lower so far, the risk is that July job growth will also be marked down,” Shruti Mishra, a U.S. economist at Bank of America Global Research, said in a report. “This could point to more sustained labor market weakness than we have been forecasting.”
Moving forward, Daco predicts payroll gains will average around 30,000 per month through the end of the year and for the nation’s jobless rate to reach 4.7% by December.
“Looking ahead, the labor market slowdown is likely to persist,” he said.
What could the jobs report mean for a Fed rate cut?
The Federal Reserve has held off on lowering interest rates as it tries to finish the job of extinguishing the raging inflation that scorched consumers during the pandemic and to assess the impact of steeper tariffs on the economy.
Fed Chair Jerome Powell signaled last month that there might be an opening for a cut in September as downside risks to employment increase. Another month of weak or flat job growth would reinforce this outlook and likely keep the central bank on track for a cut at the Fed’s next policy meeting on Sept. 16-17, according to many economists.
“The report would have to be significantly stronger than we are forecasting to dissuade the [Fed] from cutting rates,” Oxford Economics said in a recent report.
As of Sept. 3, traders see a 95% probability that the Fed will lower its benchmark rate by a quarter of a percentage point, according to the CME Group’s FedWatch tool.
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U.S. Parents Charge Kids Interest on Loans. Here’s How Much. | Entrepreneur
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As young Americans struggle with high costs of living and salaries that haven’t kept pace with inflation, some of them rely on loans to make ends meet.
Nearly half (46%) of Gen Z between the ages of 18 and 27 depend on financial assistance from their family, according to a 2024 report from Bank of America.
What’s more, even though some parents are willing to help their kids out with cash, those loans don’t always come without strings attached — sometimes in the form of interest.
Related: Gen Z Is Turning to Side Hustles to Purchase ‘the Normal Stuff’ in ‘Suburban Middle-Class America’
Financial media company MarketBeat.com‘s new report, which surveyed more than 3,000 parents, found that an increasing number are charging their adult children interest on family loans.
“The Bank of Mom and Dad has always been generous, but even generosity comes with boundaries,” says Matt Paulson, founder of MarketBeat.com. “What’s striking is that while most parents don’t expect repayment — and certainly not at commercial interest rates — inflation and rising costs are starting to reshape how families think about money.”
The average interest rate charged by parents was 5.1%, according to the data. That’s still well below the costs their children might incur elsewhere: The average personal loan rate is 12.49% for customers with a 700 FICO score, $5,000 loan amount and three-year repayment term, per Bankrate.
Only 15% of parents would be comfortable with lending their kids $5,000 or more at one time, according to MarketBeat’s research.
Family loan repayment terms can also vary significantly by location. The top five toughest state lenders based on the interest rates parents charge were Nebraska (6.8%), Oregon (6.8%), Mississippi (6.5%), Georgia (6.4%) and Arkansas (6.3%), the report found.
Parents in Delaware and Maine tended to be the most lenient when it came to charging their children interest on loans, with 2% and 4% rates, respectively, according to the findings.
Many parents who expect repayment also have a fast-tracked timeline in mind. Twenty-one percent anticipated seeing their loan repaid in one month, 15% within one year and just 8% more than a year later, per the survey.
Although 59% of parents reported being happy to help their kids with money, 27% said they would only do it if necessary, and 4% admitted to feeling resentful.
In many cases, family loans don’t just provide financial support — they’re also “emotional transactions that test trust, responsibility and family dynamics,” Paulson notes.
As young Americans struggle with high costs of living and salaries that haven’t kept pace with inflation, some of them rely on loans to make ends meet.
Nearly half (46%) of Gen Z between the ages of 18 and 27 depend on financial assistance from their family, according to a 2024 report from Bank of America.
What’s more, even though some parents are willing to help their kids out with cash, those loans don’t always come without strings attached — sometimes in the form of interest.
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Amanda Breen
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