The American job market, a pillar of its economic strength since the pandemic, is crumbling under the weight of US President Donald Trump’s erratic economic policies .

Uncertain about where things are headed, companies have grown increasingly reluctant to hire, leaving agonised jobseekers unable to find work and weighing on consumers who account for 70 percent of all US economic activity. Their spending has been the engine behind the world’s biggest economy since the Covid-19 disruptions of 2020.

The Labor Department reported on Friday that US employers – companies, government agencies and nonprofits – added just 22,000 jobs last month, down from 79,000 in July and well below the 80,000 that economists had expected.

The unemployment rate ticked up to 4.3 percent in August, also worse than expected and the highest since 2021.

“US labour market deterioration intensified in August,'' Scott Anderson, chief US economist at BMO Capital Market, wrote in a commentary, noting that hiring was "slumping dangerously close to stall speed. This raises the risk of a harder landing for consumer spending and the economy in the months ahead.''

The job market has lost momentum this year, partly because of the lingering effects of 11 interest rate hikes by the Federal Reserve’s inflation fighters in 2022 and 2023.

But the hiring slump also reflects Trump’s policies, including his sweeping and ever-changing tariffs on imports from almost every country on earth, a crackdown on illegal immigration and purges of the federal workforce.

Also contributing to the job market's doldrums are an ageing population and the threat that artificial intelligence poses to young, entry-level workers.

After revisions shaved 21,000 jobs off June and July payrolls, the US economy is creating fewer than 75,000 jobs a month so far this year, less than half the 2024 average of 168,000 and not even a quarter of the 400,000 jobs added monthly in the hiring boom of 2021-2023.

When the Labor Department put out a disappointing jobs report a month ago, an enraged Trump responded by firing the economist in charge of compiling the numbers and nominating a loyalist to replace her.

“The warning bell that rang in the labour market a month ago just got louder,’ Olu Sonola, head of US economic research at Fitch Rates, wrote in a commentary. “It’s hard to argue that tariff uncertainty isn’t a key driver of this weakness.”

Trump's protectionist policies are meant to help American manufacturers. But factories shed 12,000 workers last month and 38,000 so far this year. Many manufacturers are hurt, not helped, by Trump's tariffs on steel, aluminium and other imported raw materials and components.

Construction companies, which rely on immigrant workers vulnerable to stepped-up ICE raids under Trump, cut 7,000 jobs in August, the third straight drop. The sweeping tax-and-spending bill that Trump signed into law July 4 delivered more money for immigration officers, making threats of a massive deportations more plausible.

The federal government, its workforce targeted by Trump and by billionaire Elon Musk's Department of Government Efficiency, cut 15,000 jobs last month.

And any job gains made last month were remarkably narrow: Healthcare and social assistance companies – a category that spans hospital to daycare centres – added nearly 47,000 jobs in August and now account for 87 percent of the private-sector jobs created in 2025. (AP)