Soft Labor Data Boosts Rate Cut Odds

[Derek Brickley]

Week of September 1, 2025

Hey everyone,

Last week’s jobs data came in soft—putting a rate cut squarely back on the table for the Fed’s September 17 meeting. Here’s the breakdown:

👷‍♂️ August Job Growth Misses, Revisions Turn June Negative

Only 22,000 jobs were added in August vs. 75,000 expected. Revisions to June and July cut a combined 21,000 jobs, including a 13,000 job loss in June—the first monthly decline since 2020. Unemployment ticked up to 4.3%.

👉 What it means for rates: This weak report helped mortgage bonds rally and pushed rates lower. It also boosts the odds the Fed will cut rates this month.

🏢 Private Sector Hiring Slows

ADP data showed 54,000 jobs added in August—well below forecasts. Mid-sized businesses led, while large companies added just 18,000 jobs.

👉 Over the past 3 months, job growth has averaged just 46,000/month—a big drop from the 120K monthly average last year.

📉 Job Openings Hit 10-Month Low

July’s job openings fell to 7.18 million, the lowest since last September. The quit rate and hiring rate remain near decade lows (outside the pandemic).

👉 The ratio of job openings to unemployed workers has dropped from 2:1 in 2022 to just under 1:1 today.

📊 Jobless Claims Stay Elevated

Initial claims hit 237,000, while continuing claims held steady at 1.94 million—marking 15 straight weeks above 1.9M.

👉 That signals fewer job openings and longer unemployment stretches.

🍇 Family Hack of the Week

Celebrate National Blackberry Day (Sept 12) with this easy cobbler:

1 cup each sugar, self-rising flour, and whole milk → mix with ½ stick melted butter. Pour into greased dish. Top with 2 cups blackberries + lemon zest + ¼ cup sugar. Bake 1 hour at 350°F, sprinkle sugar at the end. Serve warm with ice cream!

📅 Coming Up This Week

• Producer Price Index (Wednesday)
• Consumer Price Index + Jobless Claims (Thursday)

Rates are already moving!

• Derek Brickley
  #LoansbyDB