US non-farm payrolls posted a weak increase in August, well below expectations. The tepid rise fueled concerns that the economy is slowing and so the Federal Reserve is likely to cut interest rates at its Sep. 17 monetary policy meeting. “The job market is stalling short of the runway,” said Daniel Zhao, chief economist at jobs site Glassdoor. “The labor market is losing lift, and August’s report, along with downward revisions, suggests we’re heading into turbulence without the soft landing achieved.”

The weak rise in August payrolls strengthens expectations that the Federal Reserve will cut interest rates next month, based on Fed funds futures market, which is pricing in a 90% probability for a 1/4-point reduction in the central bank’s target rate. “The warning bell that rang in the labor market a month ago just got louder,” said Olu Sonola, head of US economic research at Fitch Ratings. “The Fed is likely to prioritize labor market stability over its inflation mandate, even as inflation drifts further from the 2% target. It’s hard to argue that tariff uncertainty isn’t a key driver of this weakness.” Eric Teal, chief investment officer at Comerica Wealth Management agrees: “We continue to see softness growing in the labor market as tariff policy uncertainty lingers, immigration changes take effect, and AI adoption grows. The silver lining is the weaker the jobs data, the more cover there is for stimulative interest rate cuts that are on the horizon.”

Healthcare jobs are a key are of support for the labor market, but upcoming Medicare cuts could threaten hiring in this corner, reports The Wall Street Journal: “Amid a general weakening in the labor market, the danger is that the sector doesn’t have enough gasoline in the tank to keep driving employment forward. Impending Medicaid cuts, for example, could severely slow it down. What is more, the sector might turn out to not be providing as much oomph to job growth as the official data now show.”

The US Treasury could be forced to issue a huge amount of refunds if the Supreme Court rules against Trump’s tariffs. Treasury Secretary Scott Bessent said he is “confident” the tariff plan “will win” at the high court.

Gold rises above $3600 an ounce for the first time. Key catalysts include: a weaker dollar, strong central bank buying, a soft monetary policy backdrop, and geopolitical and economic uncertainty. “Investors are now starting to price an earlier and slightly deeper Fed easing cycle at a time of sticky inflation,” said Chris Turner, global head of markets research at ING. “Real interest rates — or interest rates adjusted for inflation — look set to go negative again and gold, as an inflation hedge, will outperform.”

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