Global inflation watch is back in focus as US job growth weakens sharply. The slowdown in hiring raises questions about economic growth while central banks weigh next moves on rates.
US job growth slows
In the last four months of 2025 the US economy added only 107000 jobs. That is far below the 868000 added in late 2024. The slowdown points to a weaker labor market.
Industry breakdown
Health care and hospitality were the only bright spots in August. Most sectors saw job losses including manufacturing construction and government.
Wages and inflation
Average hourly earnings rose 3.7 percent from a year earlier. This is slower than before but still above inflation which means household purchasing power is holding for now.
Household survey view
The household survey showed labor force participation up slightly but job growth lagged behind. The unemployment rate rose to 4.3 percent the highest since 2021.
Market reaction
US Treasury yields dropped to a 10 month low as investors expect weaker growth. Stocks fell on fears of slower demand and tighter labor conditions.
Fed outlook
Markets now price an 89 percent chance of a Fed rate cut this month. Many expect two or three cuts by the end of the year as inflation and jobs send mixed signals.
Job openings fall
US job openings hit the lowest since 2024 with sharp declines in the South. Still openings remain higher than in most of the pre pandemic years.
Impact of tariffs
Uncertainty around tariffs is weighing on business investment and hiring. Analysts say trade disputes are starting to show up in job numbers.
Household stress
Credit card and auto loan delinquencies are rising. Student debt payments are also adding pressure on families. This makes the case for easing monetary policy stronger.
Global angle
The eurozone saw inflation rise to 2.1 percent in August while core inflation held steady. The ECB is expected to hold rates steady for now.
China and trade
A study found that US importers are absorbing most tariff costs on Chinese goods. This raises concerns that higher prices may eventually reach US consumers.
