Analysts from the financial powerhouse JPMorgan have indicated that the lackluster jobs report for August serves as a sign of a slowdown in the US economy.

In a recent analysis, Seth Carlson, a member of the editorial team at the firm’s wealth management division, along with Vinny Amaru, a global investment strategist, reference the latest Bureau of Labor Statistics (BLS) report. This report revealed that nonfarm payrolls increased by only 22,000 jobs in August, significantly below the anticipated 75,000.

Additionally, the unemployment rate rose from 4.2% to 4.3% last month, as reported by the BLS.

Carlson and Amaru observed that major stock indices fell following the report, suggesting that the market's response indicated “tempered near-term investor optimism, as the economy shows signs of slowing.”

“Our strategists believe that the recent jobs data should keep the Fed on course to lower interest rates at its upcoming September meeting, likely by 25 basis points as hiring continues to decelerate. This would mark the Fed’s first interest rate cut since December 2024.

Although the disappointing payroll numbers indicate that an economic slowdown is in progress, our strategists still consider a recession to be unlikely.”

The CME FedWatch Tool, which calculates probabilities based on the 30-day Fed Funds futures prices, suggests there is a 93% likelihood that the Fed will reduce the federal funds target rate by 25 basis points at the FOMC meeting scheduled for later this month.