U.S. Job Growth Misses Forecast, Fed Cut Bets Near 90%
The latest ADP payrolls report shows America’s private sector added just 54,000 jobs in August, well short of the 68,000 forecast.
The figure underscores persistent labor market weakness as the Federal Reserve approaches its crucial September policy meeting.
Why It Matters for the Fed
Markets were already on edge after July’s disappointing employment numbers rattled confidence in U.S. economic resilience. With inflation pressures easing and growth indicators softening, the Fed has shifted away from its hawkish tone. Traders are now betting heavily that a rate cut is coming when policymakers gather on September 16–17.
President Donald Trump has amplified those expectations, blasting the Fed for keeping borrowing costs too high and urging faster easing to counter the drag from tariffs. The latest jobs miss is likely to give his argument more traction.
A Turning Point for Policy?
Employment is one half of the Fed’s dual mandate, alongside price stability, making these labor readings especially significant. Weak hiring combined with recent CPI moderation suggests the central bank has room to loosen policy without reigniting inflation.
The CME FedWatch tool shows markets pricing in nearly a 90% probability of a quarter-point cut this month, with at least one more reduction expected by year-end. That outlook could firm further if Friday’s official nonfarm payrolls data echo ADP’s soft signal.
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