Category: Business

(NEW YORK) — The Federal Reserve cut its benchmark interest rate a quarter of a percentage point on Wednesday, opting for its first interest rate cut this year in an effort to revive the flagging labor market.

The central bank delivered a policy long-sought by President Donald Trump, though the size of the rate cut all but certainly fell short of Trump’s desired outcome. The Federal Open Market Committee (FOMC), a policymaking body at the Fed, projected two additional quarter-point rate cuts over the remainder of the year.

Five meetings and nine months have elapsed since the Fed last cut interest rates. The federal funds rate stands between 4% and 4.25%, preserving much of a sharp increase imposed in response to a pandemic-era bout of inflation.

The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In a statement on Wednesday, the FOMC indicated greater concern for slowing employment growth than for rising inflation.

“The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen,” the FOMC said.

The high-stakes announcement marks a flashpoint in the monthslong pressure campaign directed at the Fed by Trump.

In recent weeks, Trump has moved to fire one member of the Fed’s board of governors and secure Senate confirmation for another. Both officials were on track to be among the 12 policymakers who cast votes on the interest-rate decision, though their status remained uncertain days before the Fed meeting.

The race to reshape the Fed comes after Trump railed for months against the central bank and its Chair Jerome Powell for declining to heed his call for lower interest rates. In July, Powell stressed the importance of political independence, saying it allows central bankers to make “very challenging decisions” based on “data.”

In a social media post on Monday, Trump reiterated his criticism of Powell, saying the Fed chair “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND.”

In recent months, the economy has suffered a sharp hiring slowdown alongside an uptick of inflation, setting the conditions for what economists call “stagflation.”

The economic conditions have put Fed policymakers in a bind. If the Fed raises interest rates as a means of protecting against tariff-induced inflation, it risks tipping the economy into a downturn. On the other hand, if the Fed lowers rates to stimulate the economy in the face of a hiring slowdown, it threatens to boost spending and worsen inflation.

Last month, Powell said the central bank faces a “challenging situation,” putting pressure on both sides of the Fed’s dual mission to maximize employment and control inflation.

Still, Powell said, the “balance of risks appears to be shifting” in light of a hiring slowdown made clear in a weak jobs report earlier this year that included sharp downward revisions of job gains over recent months.

Trump recently moved to fire board member Lisa Cook, who sued Trump over her attempted ouster, saying the decision violated her legal protections as an employee at the independent federal agency. Trump said he removed Cook over mortgage fraud allegations against her.

Federal law allows the president to remove a member of the Fed board “for cause,” though no president has attempted such a removal in the 112-year history of the central bank.

Last week, a federal judge issued a preliminary injunction requiring the Fed to let Cook continue serving in her role as a governor of the Federal Reserve System as her lawsuit moves through the courts.

Days later, the Trump administration filed a request with an appeals court asking to remove Cook by Monday, before the scheduled vote on interest rates. That day, an appeals court rejected Trump’s bid, clearing the path for Cook to vote at the Fed meeting. Trump may appeal the ruling to the Supreme Court.

Last month, Trump called on Cook to resign on the same day that Bill Pulte, the director of the Federal Housing Finance Agency, posted on X part of an Aug. 15 letter sent to U.S. Attorney General Pam Bondi accusing Cook of falsifying bank documents and property records to acquire more favorable loan terms, “potentially committing mortgage fraud,” the letter stated.

In a statement provided to ABC News at the time, Cook said she learned from the media about Pulte’s letter seeking a criminal referral over the mortgage application, which predated her time with the Federal Reserve.

“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” Cook said in the statement last week. “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts.”

The Senate voted 48-47 on Monday to confirm White House economic adviser Stephen Miran’s nomination to serve as a member of the Board of Governors of the Federal Reserve, paving the way for Miran to cast a vote on interest rates.

Miran has vowed to safeguard central bank independence but said earlier this month that he does not plan to resign from his position within the Trump administration. Miran is filling a vacancy created by the early retirement of Fed board member Adrianna Kugler, whose term was set to end in January.

Miran said he plans to take an unpaid leave of absence from his current role. Miran reached the decision after “advice from counsel,” since his term on the Fed board would last four months, Miran said at a Senate hearing this month.

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(NEW YORK) — The Federal Reserve on Wednesday is set to unveil its latest decision on the level of interest rates, hoping to guide the economy through a topsy-turvy stretch of slow hiring and rising inflation.

The high-stakes announcement marks a flashpoint in the monthslong pressure campaign directed at the Fed by President Donald Trump.

In recent weeks, Trump has moved to fire one member of the Fed’s board of governors and secure Senate confirmation for another. Both officials are on track to be among the 12 policymakers who will cast votes on the interest-rate decision, though their status remained uncertain days before the Fed meeting.

The race to reshape the Fed comes after Trump railed for months against the central bank and its Chair Jerome Powell for declining to heed his call for lower interest rates. In July, Powell stressed the importance of political independence, saying it allows central bankers to make “very challenging decisions” based on “data.”

Still, the central bank is widely expected to deliver the policy shift long-sought by Trump, though the size of the rate cut will all but certainly fall short of Trump’s desired outcome.

Powell recently hinted at the possibility of a rate cut, appearing to indicate greater concern for flagging employment growth than for elevated prices. Investors peg the chances of a quarter-point rate cut at about 96% and a half-point cut at nearly 4%, according to the CME FedWatch Tool, a measure of market sentiment.

In a social media post on Monday, Trump reiterated his criticism of Powell, saying the Fed chair “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND.”

Five meetings and nine months have elapsed since the Fed last adjusted interest rates. The federal funds rate stands between 4.25% and 4.5%, preserving much of a sharp increase imposed in response to a pandemic-era bout of inflation.

In recent months, the economy has suffered a sharp hiring slowdown alongside an uptick of inflation, setting the conditions for what economists call “stagflation.”

The economic conditions have put Fed policymakers in a bind. If the Fed raises interest rates as a means of protecting against tariff-induced inflation, it risks tipping the economy into a downturn. On the other hand, if the Fed lowers rates to stimulate the economy in the face of a hiring slowdown, it threatens to boost spending and worsen inflation.

Last month, Powell said the central bank faces a “challenging situation,” putting pressure on both sides of the Fed’s dual mission to maximize employment and control inflation.

Still, Powell said, the “balance of risks appears to be shifting” in light of a hiring slowdown made clear in a weak jobs report earlier this year that included sharp downward revisions of job gains over recent months.

Trump recently moved to fire board member Lisa Cook, who sued Trump over her attempted ouster, saying the decision violated her legal protections as an employee at the independent federal agency. Trump said he removed Cook over mortgage fraud allegations against her.

Federal law allows the president to remove a member of the Fed board “for cause,” though no president has attempted such a removal in the 112-year history of the central bank.

Last week, a federal judge issued a preliminary injunction requiring the Fed to let Cook continue serving in her role as a governor of the Federal Reserve System as her lawsuit moves through the courts.

Days later, the Trump administration filed a request with an appeals court asking to remove Cook by Monday, before the scheduled vote on interest rates. That day, an appeals court rejected Trump’s bid, clearing the path for Cook to vote at the Fed meeting. Trump may appeal the ruling to the Supreme Court.

Last month, Trump called on Cook to resign on the same day that Bill Pulte, the director of the Federal Housing Finance Agency, posted on X part of an Aug. 15 letter sent to U.S. Attorney General Pam Bondi accusing Cook of falsifying bank documents and property records to acquire more favorable loan terms, “potentially committing mortgage fraud,” the letter stated.

In a statement provided to ABC News at the time, Cook said she learned from the media about Pulte’s letter seeking a criminal referral over the mortgage application, which predated her time with the Federal Reserve.

“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” Cook said in the statement last week. “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts.”

The Senate voted 48-47 on Monday to confirm White House economic adviser Stephen Miran’s nomination to serve as a member of the Board of Governors of the Federal Reserve, paving the way for Miran to cast a vote on interest rates.

Miran has vowed to safeguard central bank independence but said earlier this month that he does not plan to resign from his position within the Trump administration. Miran is filling a vacancy created by the early retirement of Fed board member Adrianna Kugler, whose term was set to end in January.

Miran said he plans to take an unpaid leave of absence from his current role. Miran reached the decision after “advice from counsel,” since his term on the Fed board would last four months, Miran said at a Senate hearing this month.

Copyright © 2025, ABC Audio. All rights reserved.

(WASHINGTON) — Twelve policymakers at the Federal Reserve are set to take a high-stakes vote this week on the nation’s benchmark interest rate, attempting to steer the economy through a stormy bout of slow hiring and rising inflation.

In a highly unusual circumstance, however, two of the policymakers stand in limbo – uncertain if they will vote at all – with little more than 48 hours before the announcement.

In recent weeks, President Donald Trump has moved to fire one member of the Fed’s board of governors and secure Senate confirmation for another. The race to reshape the Fed comes after Trump railed for months against the central bank and its Chair Jerome Powell for declining to heed his call for lower interest rates.

The clash over the composition of the Fed board casts uncertainty over the Fed’s meeting on Wednesday, where officials are expected to announce the central bank’s first rate cut since December.

In a social media post on Monday, Trump reiterated his criticism of Powell, saying the Fed chair “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND.”

Trump recently moved to fire board member Lisa Cook, who sued Trump over her attempted ouster, saying the decision violated her legal protections as an employee at the independent federal agency. Trump said he removed Cook over mortgage fraud allegations against her.

Federal law allows the president to remove a member of the Fed board “for cause,” though no president has attempted such a removal in the 112-year history of the central bank.

Last week, a federal judge issued a preliminary injunction requiring the Fed to let Cook continue serving in her role as a governor of the Federal Reserve System as her lawsuit moves through the courts.

Days later, the Trump administration filed a request with an appeals court asking to remove Cook by Monday, before the scheduled vote on interest rates. In a court filing over the weekend, Cook asked the appeals court to reject Trump’s bid.

Last month, Trump called on Cook to resign on the same day that Bill Pulte, the director of the Federal Housing Finance Agency, posted on X part of an Aug. 15 letter sent to U.S. Attorney General Pam Bondi accusing Cook of falsifying bank documents and property records to acquire more favorable loan terms, “potentially committing mortgage fraud,” the letter stated.

In a statement provided to ABC News at the time, Cook said she learned from the media about Pulte’s letter seeking a criminal referral over the mortgage application, which predated her time with the Federal Reserve.

“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” Cook said in the statement last week. “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts.”

Meanwhile, Trump has sought Senate confirmation for Fed board-nominee Stephen Miran, a top economic advisor at the White House. The Senate is expected to vote on Miran’s nomination on Monday night.

Miran has vowed to safeguard central bank independence but said earlier this month that he does not plan to resign from his position within the Trump administration. Miran has been nominated for a vacancy created by the early retirement of Fed board member Adrianna Kugler, whose term was set to end in January.

If confirmed, Miran said he plans to take an unpaid leave of absence from his current role. Miran reached the decision after “advice from counsel,” since his term on the Fed board would last four months, Miran said at a Senate hearing this month.

Five meetings and nine months have elapsed since the Fed last adjusted interest rates. The federal funds rate stands between 4.25% and 4.5%, preserving much of a sharp increase imposed in response to a pandemic-era bout of inflation.

That posture is expected to shift, however. Powell recently hinted at the possibility of an interest rate cut, appearing to indicate greater concern for flagging employment growth than for rising prices.

Investors peg the chances of a quarter-point rate cut this week at 96%, according to the CME FedWatch Tool, a measure of market sentiment.

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(NEW YORK) — Mortgage rates have fallen rapidly in recent months, offering homebuyers an opportunity for some borrowing relief if they move ahead with the big-ticket purchase.

The average interest rate on a 30-year fixed mortgage stands at 6.35%, dropping from 6.5% over the week ending on Thursday, which amounted to the largest one-week drop in mortgage rates this year, FreddieMac data shows. As recently as January, the average 30-year fixed mortgage rate exceeded 7%.

The sharp drop in mortgage rates owes in part to government data showing a significant decline in hiring, which has heightened expectations that the Federal Reserve will slash interest rates and in turn put downward pressure on borrowing costs, some analysts told ABC News.

Each percentage point decrease in a mortgage rate can save thousands or tens of thousands in additional cost each year, depending on the price of the house, according to Rocket Mortgage.

“This is a significant drop,” Ken Johnson, a real estate economist at the University of Mississippi, told ABC News.

The trend poses a quandary for homebuyers, the experts added: Do buyers move quickly to snap up a favorable mortgage or wait to see if interest rates fall even further?

Mortgage rates closely track the yield on a 10-year Treasury bond, or the amount paid to a bondholder annually. Bond yields are shaped in part by expectations of the benchmark interest rate set by the Fed, some experts said.

Five meetings and nine months have elapsed since the Fed last adjusted interest rates. The federal funds rate stands between 4.25% and 4.5%, preserving much of a sharp increase imposed in response to a pandemic-era bout of inflation.

That posture is expected to shift, however. Fed Chair Jerome Powell recently hinted at the possibility of an interest rate cut, appearing to indicate greater concern for flagging employment growth than for rising prices.

Investors peg the chances of three quarter-point rate cuts by the end of this year at about 76%, according to CME FedWatch Tool, a measure of market sentiment.

The anticipated decline of interest rates has already been priced into the level of mortgage rates, however, meaning the path of rate cuts would need to become more aggressive than expected in order to push mortgage rates down further, Lu Liu, a professor at the Wharton School at the University of Pennsylvania, told ABC News.

A further slowdown of the job market could prompt the Fed to cut interest rates more than expected, but a continued resurgence of inflation could deter central bankers from easing rates at the risk of exacerbating price increases.

“Expectations of lower near-term rates are being priced in, so current mortgage rates look a bit more attractive,” Liu said.

Julia Fonseca, a professor at the Gies College of Business at the University of Illinois at Urbana-Champaign, cautioned against homebuyers attempting to predict the level of mortgage rates.

“Trying to time the market or predict future rate movements is notoriously hard to do,” Fonseca told ABC News.

Meanwhile, the typical price of a home has fallen in recent months. The median sales price of a home in the U.S. registered at $410,800 over three months ending in June, which marked a decline from a price of $423,100 over the previous three-month period, U.S. Census Bureau data shows.

“Prices have cooled, inventory is up, time on the market is up,” Fonseca said. “All of this suggests it’s a more favorable market for buyers relative to recent years. That said, it’s really hard to predict what will happen with prices in the future.”

If homebuyers move forward with a purchase but later find that mortgage rates have continued to fall, they can opt to refinance their homes, Fonseca added. She suggested homebuyers avoid mortgage contracts that include pre-payment penalties, since such fees could add to the cost of a potential decision to refinance.

“I would be guided by your needs and your personal financial situation, rather than try to make predictions about future prices and future interest rates,” Fonseca added.

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(NEW YORK) — Consumer prices rose 2.9% in August compared to a year ago, marking an uptick in price increases as President Donald Trump’s tariff policy intensified. The reading matched economists’ expectations.

The fresh inflation data indicated an acceleration from a 2.7% inflation rate recorded in the month prior, according to the U.S. Bureau of Labor Statistics. Price increases remain below the 3% rate recorded in January, the month Trump took office.

The new report arrives days before the Federal Reserve is set to announce a widely expected quarter-point interest rate cut. The price hike last month may give policymakers pause as they weigh an interest rate cut, since a reduction of borrowing costs could boost spending and put upward pressure on prices.

Egg prices, a longtime symbol of rising costs, were flat in the month of August. Still, the price of eggs stands nearly 11% higher than where it was a year ago. The price of coffee has surged 20% over the past year, the data showed.

Housing costs jumped 0.4% in August, which accounted for the largest share of the overall hike in prices, the BLS said. Food prices rose 0.5% last month, while energy costs climbed 0.7%, the data showed.

In all, prices climbed 0.4% from July to August, which marked the largest monthly increase since December.

In recent months, tariffs modestly contributed to the uptick in overall inflation, analysts previously told ABC News, but overall price increases owed largely to a rise in housing and food products with little connection to Trump’s levies.

The inflation report arrived at a wobbly moment for the nation’s economy. In recent months, inflation has picked up while hiring has slowed, posing a risk of an economic double-whammy known as “stagflation.”

A jobs report last week showed a sharp decrease in hiring in August, extending a lackluster period for the labor market. Meanwhile, a revision of previous hiring estimates on Tuesday revealed the U.S. economy added far fewer jobs in 2024 and early 2025 than previously estimated, deepening concern about the health of the U.S. job market.

The weak jobs data has raised alarm among some analysts that the U.S. economy may be slipping toward a recession, though the economy has largely averted the type of widespread job losses that often accompany a downturn.

The economic conditions have put Fed policymakers in a bind. If the Fed raises interest rates as a means of protecting against tariff-induced inflation, it risks tipping the economy into a downturn. On the other hand, if the Fed lowers rates to stimulate the economy in the face of a hiring slowdown, it threatens to boost spending and worsen inflation.

In response to the flagging labor market, the Fed is expected to cut interest rates when policymakers meet next week. Investors peg the chances of a quarter-point rate cut this month at about 90% and the odds of a half-point cut at roughly 9%, according to CME FedWatch Tool, a measure of market sentiment.

The inflation data on Thursday marks the latest figures unveiled by the BLS since Trump fired BLS Commissioner Erika McEntarfer last month in response to a weak monthly jobs report. Trump claimed without evidence that McEntarfer had manipulated statistics for political reasons.

McEntarfer, a Biden appointee who was confirmed by the Senate in 2024, had served in the federal government for two decades.

“It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy,” McEntarfer said in a social media post after her dismissal. “It is vital and important work and I thank them for their service to this nation.”

William Beach, a former commissioner of the Bureau of Labor Statistics, who was appointed by Trump, condemned McEntarfer’s dismissal.

“The totally groundless firing of Dr. Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS, sets a dangerous precedent and undermines the statistical mission of the Bureau,” Beach posted on X.

McEntarfer did not respond to an earlier ABC News request for comment.

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(NEW YORK) — Wholesale prices unexpectedly dropped in August, clocking in lower than economists expected and defying concerns about a tariff-induced spike in costs suffered by suppliers.

Producer prices fell 0.1% in August, rolling back some of a sharp increase in wholesale prices that took hold in the previous month, the U.S. Bureau of Labor Statistics said on Wednesday.

Since President Donald Trump began escalating tariffs earlier this year, the monthly wholesale-price measure has drawn close attention as an indicator of a potential pass through to consumer prices.

In July, producer prices rose 0.9%, exceeding economists’ expectations and stoking fear of an eventual hike in prices paid by shoppers. The downshift in wholesale prices last month could ease some of those worries, though analysts will gain further clarity from consumer price data scheduled to be released on Thursday.

The wholesale price data on Wednesday held some cause for concern, however. A measure of core producer prices – which strips out volatile prices for food and energy – jumped 0.3% in August, which marked the fourth consecutive month of increases for that measure.

Overall, wholesale prices climbed 2.8% over a year ending in August, which marked the largest one-year jump in the index since March.

The fresh data arrives at a challenging time for the nation’s economy. In recent months, inflation has picked up while hiring has slowed, posing a risk of an economic double-whammy known as “stagflation.”

Fed Chair Jerome Powell recently hinted at the possibility of an interest rate cut, appearing to indicate greater concern for flagging employment growth than for rising prices. Investors widely expect a quarter-point interest rate cut when Fed policymakers meet later this month.

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(NEW YORK) — U.S. employers added far fewer jobs in 2024 and early 2025 than previously thought, indicating the labor market may have been significantly weaker than initial estimates had suggested.

The U.S. economy added 911,000 fewer jobs over the 12 months ending in March than previously estimated, the U.S. Bureau of Labor Statistics (BLS) said on Tuesday. The figure, which exceeded economists’ expectations, marks the largest revision ever recorded.

The revision, a routine step in the compilation of government labor statistics, assesses monthly survey estimates alongside state unemployment data. The fresh data comes weeks after President Donald Trump fired BLS Commissioner Erika McEntarfer in response to a weak monthly jobs report.

The scale of the revision announced on Tuesday exceeds a downward reduction in hiring estimates last year that has drawn criticism from Trump in recent weeks.

In that case, the BLS said in August 2024 that U.S. employers had hired 818,000 fewer workers over a previous year-long period. When Trump fired McEntarfer last month hours after the release of monthly jobs data, he mentioned frustration with the annual revision issued in 2024.

“I believe the numbers were phony just like they were before the election, and there were other times,” Trump said, pointing to the revision in the jobs numbers last year that he claimed, without evidence, was an attempt to benefit Democrats heading into the election.

The BLS, a government agency within the Department of Labor, tracks a host of key economic indicators, including widely anticipated hiring and inflation reports released each month.

The BLS releases an initial estimate of its jobs report based on an initial tranche of data, but the agency often revises the figure in subsequent months as households and businesses return additional data. After a slow-moving process of compiling state unemployment data, the agency releases an additional revision teasing out accurate findings.

McEntarfer, a Biden appointee who was confirmed by the Senate in 2024, had served in the federal government for two decades.

“It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy,” McEntarfer said in a social media post after her dismissal. “It is vital and important work and I thank them for their service to this nation.”

William Beach, a former commissioner of the Bureau of Labor Statistics, who was appointed by Trump, condemned McEntarfer’s dismissal.

“The totally groundless firing of Dr. Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS, sets a dangerous precedent and undermines the statistical mission of the Bureau,” Beach posted on X.

McEntarfer did not respond to an earlier ABC News request for comment.

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(NEW YORK) — Employers in nearly every industry have cut back on hiring, according to the latest data, leaving job seekers with fewer places to turn.

A recent jobs report extended a lackluster run of labor data that stretches back to the beginning of the summer. While the unemployment rate stands at a historically low level, millions of out-of-work Americans face stiff conditions.

Nearly two million job seekers have been out of the workforce for more than 27 weeks, which amounts to about a quarter of all unemployed people, the U.S. Bureau of Labor Statistics said on Friday.

At the same time, worker confidence in their ability to find a new job has hit a record low, according to a survey released by the New York Federal Reserve on Monday.

Analysts who spoke to ABC News attributed the tepid job market in part to economic uncertainty hanging over employers as a result of President Donald Trump’s tariff and immigration policies. The recent adoption of artificial intelligence tools has also diminished prospects for jobs in some entry-level roles, some analysts added.

“New hiring has really slowed to a crawl,” Mark Hamrick, senior economic analyst at Bankrate, told ABC News.

In a note to clients Friday, Joseph Brusuelas, global economist at RSM, described the U.S. as a “slow hire, slow fire economy,” saying that a sharp increase in tariffs has burdened some importers with higher taxes and cast doubt over the nation’s economic outlook.

“The impact of tariffs on hiring is undeniable,” Brusuelas said in the note, adding that the levies had “pushed economic uncertainty to the highest level in years.”

Restrictive immigration policies, meanwhile, have reduced the supply of available workers and threatened employers with higher labor costs, deepening a sense of uncertainty, some analysts said.

The Trump administration has pursued an immigration policy that features the detention of undocumented immigrants at work sites and the revocation of Temporary Protected Status – a form of temporary legal status – for hundreds of thousands of immigrants.

“We’re deporting lots and lots of working immigrants. That just stirs the pot even further in terms of employers feeling, ‘We don’t know what’s going on here,’” Michelle Holder, a labor economist at John Jay College of Criminal Justice, told ABC News.

For its part, the Trump administration downplayed the weaker-than-expected jobs report late last week, voicing expectations of an upward revision of the data and predicting better job performance.

A tax-cut measure enacted by Trump earlier this year will boost business investment and drive up hiring, Kevin Hassett, director of the National Economic Council, told reporters on Friday.

“President Trump knows that we’re super optimistic about the future of the jobs numbers, because we’re seeing a massive blowout in capital spending,” Hassett said.

The hiring cooldown has hit nearly every industry, including leisure and hospitality and the federal government, BLS data shows.

The manufacturing sector has suffered a net loss of 78,000 jobs this year in the midst of a tariff policy that the Trump administration has said is aimed at reviving domestic production. Construction, another key sector dependent on long-term investment, has incurred a net loss of 10,000 jobs over the past three months.

“This has to do with producers’ uncertainties about the future,” Holder said.

In response to the flagging labor market, the Fed is expected to cut interest rates when policymakers meet later this month. Investors peg the chances of a quarter-point rate cut this month at about 88% and the odds of a half-point cut at nearly 12%, according to CME FedWatch Tool, a measure of market sentiment.

In theory, a reduction of interest rates could boost hiring as borrowing expenses fall and businesses encounter more favorable conditions for new investment. However, the Fed’s incremental approach is unlikely to yield major improvement for job seekers anytime soon, Hamrick said.

“It will have a marginal impact for people,” Hamrick added. “I don’t see that producing a sea change in the environment anytime soon.”

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(WASHINGTON) — Fresh jobs data on Friday showed a continued hiring slowdown in the first such release since a dismal jobs report last month prompted President Donald Trump to fire the top official tasked with compiling labor statistics. The reading fell well short of economists’ expectations.

The U.S. added 22,000 jobs in August, according to data from the U.S. Bureau of Labor Statistics. That figure showed a sharp decrease from 79,000 jobs added in the previous month. The unemployment rate ticked up to 4.3%, but it remained at a historically low level.

A previous jobs report showed a sharp slowdown of hiring over the summer, eliciting concern among some economists about a possible recession.

The U.S. added an average of about 28,000 jobs over three months ending in July, which marked a major cooldown from the roughly 196,000 jobs added on average over the previous three-month period, U.S. Bureau of Labor Statistics (BLS) data showed.

The jobs report on Friday included a downward revision for the month of June, saying the U.S. labor market had lost 13,000 jobs that month, much lower than a previous estimate of 14,000 jobs added. It marked the first monthly job loss since December 2020.

The latest jobs data holds implications for a widely expected interest rate cut when top Federal Reserve policymakers gather in two weeks.

Fed Chair Jerome Powell recently said the central bank would “proceed carefully” but he hinted at the possibility of an interest rate cut, appearing to indicate greater concern for flagging employment growth than rising prices.

The lower-than-expected reading on Friday could cement a potential interest rate cut, which would amount to the first interest-rate adjustment since last year.

Late Thursday, investors pegged the chances of a quarter-point rate cut this month at 97%, according to CME FedWatch Tool, a measure of market sentiment. As of Friday morning, the odds of a a quarter-point cut had risen to 99%.

Hours after the release of the weak jobs report last month, Trump removed BLS Commissioner Erika McEntarfer. The jobs report featured downward revisions, prompting Trump to suggest without evidence that the job statistics had been “manipulated.” The BLS routinely revises estimates of jobs added in previous months.

McEntarfer, a Biden appointee who was confirmed by the Senate in 2024, had served in the federal government for two decades.

“It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy,” McEntarfer said in a social media post after her dismissal. “It is vital and important work and I thank them for their service to this nation.”

William Beach, a former commissioner of the Bureau of Labor Statistics, who was appointed by Trump, condemned McEntarfer’s dismissal.

“The totally groundless firing of Dr. Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS, sets a dangerous precedent and undermines the statistical mission of the Bureau,” Beach posted on X.

McEntarfer did not respond to an earlier ABC News request for comment.

As a replacement for McEntarfer, Trump nominated E.J. Antoni, chief economist at the conservative-leaning Heritage Foundation. Antoni is a longtime critic of the BLS and a contributor to the conservative policy blueprint Project 2025.

“Our Economy is booming, and E.J. will ensure that the Numbers released are HONEST and ACCURATE,” Trump said of Antoni in a social media post.

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(NEW YORK) — The price of gold topped $3,500 per ounce for the first time ever on Tuesday, reaching toward new record highs as trading stretched into midday.

Gold prices have soared 35% so far this year, far outpacing a 9% gain in the S&P 500. Over that period, the Dow Jones Industrial Average has jumped 6% and the tech-heavy Nasdaq has climbed 10%.

The rush toward gold reflects heightened economic uncertainty, experts said. The safe-haven asset offers investors a hedge against an uneasy financial environment as a sharp hiring slowdown coincides with a steady uptick of inflation, according to analysts. Stress in long-term bond markets and a devaluation of the U.S. dollar have unsettled alternative assets typically viewed as low-risk investments, they added.

“The probability of an economic slowdown has greatly increased and people naturally look for a safe haven asset,” Campbell Harvey, a professor at Duke’s Fuqua School of Business who studies gold prices, told ABC News.

However, gold prices carry volatility of their own, especially when buyers enter the market at a high point, risking losses instead of a security blanket.

The run-up in gold prices comes after a steep drop-off in monthly hiring and a gradual rise in inflation.

The U.S. added an average of about 35,000 jobs over three months ending in July, which marked a major cooldown from roughly 196,000 jobs added on average over the previous three-month period, U.S. Bureau of Labor Statistics data showed.

Meanwhile, a measure of underlying inflation stands at its highest level since February, in part due to tariff-induced price increases.

Investors widely expect the Federal Reserve to cut interest rates this month in an effort to counteract the labor market slowdown. Markets peg the chances of a quarter-point interest rate cut at 91%, according to CME FedWatch Tool, a measure of investor sentiment.

The expectation of an interest rate cut establishes financial conditions marked by low interest rates for short-term U.S. bonds alongside persistently elevated interest rates for long-term bonds, since many investors fear a return of inflation amid ongoing tariffs, Aakash Doshi, head of gold strategy at State Street Investment Management, told ABC News.

Those dynamics reflect a favorable environment for gold, Doshi added. On the one hand, a near-term interest rate cut would reduce competition from short-term U.S. bonds, since the interest payments on such products will fall.

Meanwhile, elevated interest rates for long-term bonds reflect flagging demand for such investments as inflation fears mount and President Donald Trump pressures the Fed to dramatically lower interest rates. By comparison, gold appears a relatively safe long-term investment.

“The Fed is cutting because of a weak labor market but inflation is still elevated. That supports alternative fiat assets like gold,” Doshi told ABC News.

The flight away from some long-term bonds has coincided with a depreciation in the value of the U.S. dollar. Its value against other currencies plunged about 11% over the first half of 2025, the biggest decline in more than 50 years, a Morgan Stanley report last month found.

The decline in the U.S. dollar’s value reflects a shift away from global dependence on the dollar as a global reserve currency, Harvey said. As a replacement for the dollar, some investors have sought out gold, boosting the asset’s price, he added.

“Countries and institutions are diversifying their portfolios, which are heavily weighted to U.S. dollar assets. They’re adding something else – and that something else is in part gold,” Harvey said.

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