Closing post
Time to recap…
The US jobs market stalled over the summer, adding just 22,000 jobs in August and continuing a slowdown in the labor market as businesses adjusted to disruptions caused by tariffs.
The latest jobs report also contained more bad news. The US lost 13,000 jobs in June, according to the latest survey, the first time it went into the negative since December 2020.
The unemployment rate for August inched up to 4.3%, the highest it’s been since 2021.
The healthcare sector added 31,000 last month but most other sectors were flat or lost jobs.
The report highlighted worrying trends:
Federal employment dropped 15,000 jobs in August, totaling 97,000 jobs lost since January.
Manufacturing jobs went down by 12,000 in August and have tumbled 78,000 for the year.
The racial unemployment gap widened in August. Black Americans are seeing an unemployment rate of 7.5%, compared to 6.1% last August. The unemployment rate for White Americans is 3.7%.
Here’s the full story:
August’s jobs report was dragged down by job losses in wholesale trade, manufacturing and energy and mining sectors — industries that are exposed to president’s levies, points out the Financial Times.
“Trade-exposed sectors were obvious victims in this morning’s payrolls report,” said Carrie Freestone, an economist at Royal Bank of Canada.
White House economic adviser Kevin Hassett has described today’s jobs report as “a bit of a disappointment” during a CNBC interview.
Intriguingly, he also expressed confidence that the employment numbers would “revise up” in future reports.
When Hassett was asked if he was concerned about a sluggish hiring rate, he responded that members of his own family have recently been hired, adding:
“Both of them started their new jobs about a week ago. And so you are seeing that people are being hired.”
Updated
The gold price has hit yet another record high today, after the weak US jobs report.
Gold traded as high as $3,597.66 per ounce, extending its recent rally driven by investors seeking protection from inflation.
Mohamed A. El-Erian, advisor to Allianz, reports that “gold prices continue to march higher.”
Post–U.S. jobs data, government bond yields are down, the yield curve has steepened, and oil prices are lower — all consistent with historical patterns and correlations.
— Mohamed A. El-Erian (@elerianm) September 5, 2025
Less in line with past experience, and indicative of some broader structural shifts, gold prices continue to… pic.twitter.com/5yZ60O50fe
President Trump is wrong to put the blame on the Fed for the latest employment figures, Professor Costas Milas of University of Liverpool’s management school, tells us.
A new academic paper finds that Chicago’s National Financial Conditions Index (NFCI) and economic uncertainty measures have good real-time forecasting power for the US employment. Now then: NCI is currently no worse than when Trump won in November; however the monthly EPU is very much elevated thanks to Trump’s economic policies.
Put together, these measures point to some slowdown in employment, triggered by Trump’s policies. So, a 25 basis points interest rate cut seems a reasonable hedge later this month!
Arthur Laffer, Jr, President at Laffer Tengler Investments, says a shift is taking place in the US economy due to government cuts, and the AI boom.
Laffer says:
Some of the impact is coming from the DOGE initiatives as Federal workers who took buyouts leave their jobs but also interesting in the numbers is the decline in manufacturing jobs.
We believe that this is being caused by two factors: tariffs and AI adoption. The tariff changes have impacted some businesses much more than others. The traditional legacy manufacturing base in the US is having to adjust to the tariff impacts by reducing costs mostly through automation and robotics. New and emerging manufacturing is implementing AI/robotics at a faster and higher rate to drive efficiency and cost reductions.
Trump: Fed should have lowered rates long ago
Donald Trump has found someone to blame for the slump in hiring in his first year in office.
Posting on his Truth Social site, the president says:
Jerome “Too Late” Powell should have lowered rates long ago. As usual, he’s “Too Late!”
Another cause of the jobs slowdown, of course, could be the uncertainty and upheaval caused by the US trade war.
Isaac Stell, investment manager at Wealth Club, says:
“A rate cut in September is now a forgone conclusion following a weaker than anticipated jobs report. Not only are today’s figures showing that cracks are appearing in the labour market but revisions to prior months job reports show the picture is far less rosy than previously thought. The unemployment rate is also an area of concern hitting its highest level since October 2021.
The US has been through a myriad of trials recently, so it is no surprise that employers remain cautious on hiring, given the uncertainty over tariffs, trade and immigration policies.
One theory for the slowdown in the US jobs market is that companies are deploying AI systems rather than taking on more staff.
Nancy Tengler, CEO and CIO of Laffer Tengler Investments, explains:
We believe companies are investing in technology instead of human capital. We heard this from the companies during earnings, we see it in the business investment capex, which was up dramatically in the quarter and driven almost 50% by technology spending.
This is consistent with our thesis for the last four years, that draws an analogy to the 1990s and the productivity-driven boom that drove the economy and stock market for the second half of the decade.
This chart from ING shows how the US jobs market has slowed in 2025:
They say:
Another soft jobs report is intensifying calls for meaningful Federal Reserve interest rate cuts. Consumers are already worried about squeezed spending power from tariffs and are now increasingly concerned about job security. Fed doves will intensify their calls for action
The weakness in the US jobs market could encourage some policymakers at the Fed to consider a jumbo interest rate cut, rather than just quarter-point reduction to rates.
Janet Mui, head of market analysis at wealth manager RBC Brewin Dolphin, explains:
“The addition of just 22,000 jobs in August underscores a clear cooling trend in the U.S. labour market.
Manufacturing payrolls, which are particularly sensitive to tariffs, saw further declines and have now dropped by 42,000 since April this year.
This weak print is politically awkward for the administration, which has focused heavily on job creation via tariff-led industrial policy. With clear signs of slack emerging, today’s U.S. jobs report gives a potential green light for the Federal Reserve to cut rates in September. There is even chatter that a jumbo 50bps rate cut is on the table, depending on next week’s inflation data.
Investors are increasingly positioning for a shift toward looser monetary policy, with Fed funds rate expectations dipping below to 2.8% by the end of 2026.”
US stock market hits record high after weak jobs report
Wall Street traders have driven stocks up to a record high at the start of trading in New York.
The S&P 500 share index, and the tech-focused Nasdaq share index have both touched intraday record highs as soon as the opening trading bell was rung.
That’s a surprising reaction to the weak August jobs report, until you remember that investors are now more convinved that the Federal Reserve will cut interest rates.
Neil Birrell, chief investment officer at Premier Miton Investors, explains:
“The US jobs market is probably the most watched economic data at the moment, having been noted by the Fed as a key indicator.
The August data shows a notably lower gain in payrolls than expected and the unemployment rate moved up to 4.3% with the average weekly hours worked falling.
There isn’t a huge amount to read into the numbers that is surprising, but it does suggest a weakening jobs market, which will probably nail down a Fed rate cut this month.”
Updated
Here’s another example of how the US jobs market has weakened:
The labor market is going from frozen to cracking.
— Heather Long (@byHeatherLong) September 5, 2025
Look at how many industries have LOST jobs in the past 3 months.
Mining -13,000
Construction -10,000
Manufacturing -31,000
Information -15,000
Business/Professional -51,000
Federal gov't -34,000
Finance 0 job gains
The US job… pic.twitter.com/BsUYoCTMX3
Capital Economics: US labor market has headed off a cliff-edge
August’s employment report confirmed that “the labour market has headed off a cliff-edge,” says Bradley Saunders, North America economist at consultancy Capital Economics.
Saunders told clients:
Non-farm payrolls rose by just 22,000 last month, while June’s 19,000 increase was revised to show a 27,000 fall – the first out-and-out decline in monthly employment since late 2020.
Along with a slight upward nudge to July’s figure, this leaves the three-month average employment gain at 29,000. The private sector added just 38,000 jobs last month, and even this modest figure owed a lot to a 47,000 rise in health care & social assistance employment.
Elsewhere, employment fell by 12,000 in both manufacturing and wholesale trade, as tariffs continued to bite. This takes the total toll on manufacturing employment since the start of the year to 78,000, confounding hopes of a tariff-led reshoring renaissance.
Updated
US manufacturing employment down by 78,000 in last year
One of the many pieces of bad news in today’s US jobs report is that manufacturing employment is down by 78,000 over the year.
That shows that Donald Trump’s promises of a factory resurgence have not yet been delivered.
I'm not a big believer in diving into the industry breakdowns because I believe that all jobs matter.
— Justin Wolfers (@JustinWolfers) September 5, 2025
But the Administration has made dramatic policy shift to boost manufacturing, and it just ain't working. Manufacturing employment fell -12k, and is down -78k over the year.
Updated
Bond yields fall after US jobs report misses forecasts
The weak US jobs report is sending investors racing to buy government bonds, driving up prices and lowering yields.
The yield, or interest rate, on US 30-year bonds has dropped by 6 basis points (0.06 percentage points), with shorter-dated Treasuries also rallying following the news that just 22,000 new jobs were created across the US last month.
UK government debt is benefitting too, just days after a painful sell-off.
Today, UK 30-year gilt yields have dropped by 5bps to 5.528%, the lowest since 18 August 18.
Benchmark 10-year UK bonds have also hit their strongest level since 18 August; they’re down 6bps at 4.668%.
That’s good news for chancellor Rachel Reeves – lower borrowing costs will mean the ‘black hole’ in her budget calculations will be smaller.
The downside, though, is that a weakening US economy is bad news for every other country too….
“There’s barely been any job growth in the past 4 months,” points out Heather Long, chief economist at credit union Navy Federal.
Responding to today’s weak US jobs report, Long posts:
Almost all the jobs added are in healthcare. Without healthcare, job growth would be NEGATIVE in the past few months.
The Federal Reserve has to cut in September. And maybe October now.
— Heather Long (@byHeatherLong) September 5, 2025
The US economy lost -13,000 jobs in June -->The first negative month since December 2020 (!)
There's barely been any job growth in the past 4 months.
Almost all the jobs added are in healthcare. Without… pic.twitter.com/p2hrN8wsh0
September Fed rate cut looks nailed on
The sharp deterioration in hiring across America in the last few months makes it virtually certain that the US Federal Reserve will cut interest rates at its meeting later this month.
The odds of a September rate cut are 99%, according to CME’s Fedwatch tool (as they also were early this morning).
But as Richard Carter, head of fixed interest research at Quilter Cheviot explains, inflation could complicate the decision:
“Markets have been pricing in a 0.25% rate cut at the Federal Reserve’s upcoming monetary policy meeting, and today’s softer than expected jobs number may well grant that wish. Total nonfarm payroll employment shows August saw an increase of just 22,000, down markedly from a revised 79,000 in July and far below estimates. Meanwhile, the unemployment rate rose slightly to 4.3%.
“Last month’s payroll data showed large downward revisions to previous months, with May and June’s employment numbers dropping by a combined 258,000 from initial estimates. Today, we have seen a further downward revision to June’s total, taking it from an increase of 14,000 to a decrease of 13,000, and a modest 6,000 upward revision to July’s figure.
“Earlier this week, jobless benefit claims ticked higher, and today’s worse than expected payrolls figure cements the fact that the jobs market is weakening significantly. Following the Fed’s decision to hold rates in July, markets had already largely priced in a cut, regardless of today’s numbers. Still, one major obstacle remains. Inflation continues to complicate the Fed’s path, and next week’s CPI print will be critical, especially as several FOMC members remain cautious about easing policy under political pressure. With the full impact of Trump’s tariffs still unfolding, a hotter than expected inflation reading could lead to a split decision later this month.”
Dollar slumps after weak jobs report
The US dollar is weakening on the foreign exchanges, after today’s shockingly bad jobs report.
The news that non-farm payrolls rose by just 22,000 in August, missing forecast of 75,000 new jobs, has pushed the dollar down against other major currencies.
The pound is now up three-quarters of a cent today, at $1.35, meaning it has now almost recovered its losses during Tuesday’s bond market wobble.
The Swiss franc has gained 0.6% too.
The dollar index, which measures the greenback against a basket of currencies, has dropped by 0.66%, as this chart shows:
Where jobs were created, or lost, in August
The BLS reports that the US healthcare section added 31,000 jobs in August, which is below the average monthly gain of 42,000 over the prior 12 months.
Employment in social assistance continued to trend up in August (+16,000), reflecting continued job growth in individual and family services.
But there was a 15,000 drop in employment in federal government. This area has now lost 97,000 jobs since its peak in January. That may not capture the full impact of the DOGE job cuts, as employees on paid leave or receiving ongoing severance pay are counted as employed.
There were also 6,000 job losses in mining, quarrying, and oil and gas extraction.
Wholesale trade employment fell by 12,000, as did manufacturing employment.
Employment in transportation equipment manufacturing declined by 15,000 in August, which the BLS says is partly due to strike activity.
It adds:
Employment showed little change over the month in other major industries, including construction, retail trade, transportation and warehousing, information, financial activities, professional and business services, leisure and hospitality, and other services.
US economy lost jobs in June!
Ooof! Today’s non-farm payroll report also shows that America actually shed jobs in June.
The US Bureau of Labor Statistics reports that the change in total nonfarm payroll employment for June was revised down by 27,000, from +14,000 to -13,000.
July’s Payroll report has been revised up by 6,000, from +73,000 to +79,000.
US economy only adds 22,000 jobs in August
Newsflash: The US economy added much fewer jobs than expected last month, in a sign that the labor market may be cooling sharply.
August’s non-farm payroll rose by just 22,000 jobs, the Bureau of Labor Statistics has reported, much weaker than the 75,000 expected.
That’s a very weak jobs report, and the latest signal that the US economy is losing momentum.
The US unemployment rate has risen to 4.3%.
The BLS says:
A job gain in health care was partially offset by losses in federal government and in mining, quarrying, and oil and gas extraction.
Full story: Tesla offers Elon Musk a trillion-dollar pay package
The US non-farm payroll is notoriously tricky to forecast.
It feels like the only guarantee is that the original number will probably be revised, higher or lower, in subsequent months.
Today, there are a range of forecasts – from just 25,000 new jobs to over 100,000 – which have been added up to give the consensus forecast of 75,000.
#NFP| PREVIEW: August US Nonfarm Payrolls Expected At 75K; Unemployment Rate At 4.3%
— LiveSquawk (@LiveSquawk) September 5, 2025
What Top Economists Are Forecasting From Friday’s 13:30 BST US Job Report: pic.twitter.com/Qtpizkqm4q
US jobs report: a preamble
Tension is mounting in the financial markets as investors nervously await the latest US jobs report, due in half an hour.
August’s Non-Farm Payroll is forecast to show a 75,000 increase in employment last month, while the unemployment rate is expected to edge higher to 4.3%.
That would be a very small increase on July’s NFP report, which rose by 73,000 (along with substantial revisions to May and June’s data) – prompting Donald Trump to fire the head of the Bureau of Labor Statistics a month ago.
Another weak report today will put sizeable pressure on the US Federal Reserve to start cutting interest rates, while a strong NFP would complicate the picture.
Mohit Kumar of investment bank Jefferies explains:
We have been in the camp of a summer slowdown in employment, and we retain the view. The initial NFP release is a bit of a random number and this data would be taken with a grain of salt given the recent changes at the BLS.
In our view, market reaction would be bit of a barbell strategy. An inline or slightly weaker number would be good for risky assets. If the number is too low (less than 20k) it would raise concerns over the health of the economy. If it’s too high (above 150K), it would raise concerns over the ability of the Fed to cut rates.
Updated
Musk's $1tn pay proposal - snap reaction
Tesla’s proposed $1tn pay deal for Elon Musk is “a massive package without precedent in corporate America”, says Bloomberg.
They add:
The plan dangles a financial windfall and expanded control of the company to Musk, already the world’s richest person, after his 2018 package valued in excess of $50 billion was struck down by a Delaware court.
While Tesla appeals that decision, the board is seeking other ways to compensate its CEO, including with an interim stock award in early August valued at about $30 billion.
The Financial Times predicts that “the sheer scale of the deal is likely to revive a fierce debate over the earnings of the world’s richest man”.
The FT points out that achieving the maximum payout of 423mn shares will be “extremely challenging”, adding:
Musk would have to boost Tesla’s market capitalisation to $8.5tn from $1.09tn today. That is more than twice that of Nvidia, currently the most valuable company in the world at $4.2tn.
The Wall Street Journal flags that the proposal would also give Musk increased voting power at the EV maker.
Tesla proposes $1tn pay package for Elon Musk
Tesla’s board has proposed a new pay package for Elon Musk which would allow their chief executive to earn a staggering $1 trillion, if he hits a series of demanding targets.
The plan could see Musk awarded shares totalling 12% of Tesla’s total stock, if he engineers a surge in its value, grows its profits, and hits various operational goals.
Explaining the plan, Tesla’s board say it is vital to keep Musk at the company in the long term, suitably motivated.
They argue that Tesla can help bring about a society that “democratizes autonomous goods and services”, by creating and selling “innovative and affordable technologies at scale”
Tesla board members Robyn Denholm and Kathleen Wilson-Thompson say:
We believe that Elon’s singular vision is vital to navigating this critical inflection point. We also recognize the formidable nature of this undertaking and as a result, the importance of having a leader who is not only willing and capable but eager to meet this challenge.
Simply put, retaining and incentivizing Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history.
Under the plan, Musk would collect shares in instalment as Tesla’s value rises, from around $1tn today. To hit the maximum share payout, he needs to raise Tesla’s market capitalization to $8.5tn.
That, Tesla point out, is "approximately equal to the combined market capitalizations of each of Meta, Microsoft and Alphabet” today.
Installments of the pay packet will also pay out if Tesla delivers 20m vehicles, sells 10m active FSD subscriptions, sells a million AI robots, gets 1m Robotaxis into Commercial operation, or makes $400bn in adjusted EBITDA profits.
Urging shareholders to back the proposal, Denholm and Wilson-Thompson say:
“If Elon achieves all the performance milestones under this principle-based 2025 CEO Performance Award, his leadership will propel Tesla to become the most valuable company in history.”
Updated
The downgrade to UK retail sales this is a sign that consumers were more reluctant to spend – not a good sign for economic growth.
Rob Wood, chief UK economist for Pantheon Macroeconomics, explains:
“Official retail sales volumes growth now averages 0.2% month to month in the first half of 2025, compared to 0.3% previously.
“Weaker sales growth on average this year points to consumers reluctant to spend, which could challenge the growth outlook.”
Wood added there are signs that households have “rebuilt their rainy day savings and are cutting back on the amount of money they squirrel away each month, which should help support spending”.
Barbara Teixeira Araujo, economist at Moody’s Analytics, says today’s retail sales report shows that the first quarter of the year was not as strong as previously thought:
“That U.K. retail sales rose by a strong 0.6% month over month in July—building on a 0.3% increase in June—was definitely good news, especially given the bad vibes coming from the labour market. But we caution against reading too much into the headline.
Not only did the underlying pace of growth remain lacklustre, with growth still falling by 0.6% q/q in the three months to July, but there are now significant questions around the reliability of those figures. Issues found with seasonal adjustment led to a thorough overhaul of the methodology this month, resulting in a completely different story for the first half of 2025—and in a much weaker first quarter than previously anticipated.
While this should not lead to major revisions to GDP growth, it adds insult to injury for the ONS, which is already struggling to produce reliable labour market data.
Moody’s outlook for the UK economy hasn’t changed, though, Teixeira Araujo adds:
With consumer confidence remaining weak and the labour market clearly deteriorating, retailers will continue to struggle with muted demand. While consumer spending won’t crash, it will provide only little support to growth over the coming quarters.”
Here’s our news story on the latest data error at the Office for National Statistics:
Housebuilder shares help to lift FTSE 100
The London stock market is ending the week on the front foot.
The FTSE 100 share index has risen by 30 points, or 0.33%, to 9247 points this morning.
Housebuilders Barratt Redrow (+1.45%) and Berkeley Group (+1.4%) are among the risers, following Halifax’s house price data…. and a statement from Berkeley that it is on track to hit its profit guidance this year.
Experts: 'hard to have confidence' in ONS data
The delay in publishing today’s retail sales data, alongside the large historical revisions due to the ONS’s errors, only add to the questions around the quality of the data, says Matt Swannell, chief economic advisor to the EY ITEM Club.
Swannell says it’s hard to have confidence in the Office for National Statistics’ data:
“The publication of today’s release was delayed by two weeks to ‘allow for further quality assurance’. The ONS revealed that this was to correct an error in its seasonal adjustment process. As a result, today’s release showed downward revisions to the level of sales in most months over the past couple of years, with some very large downgrades to specific months.
The most noteworthy were a 1.8ppt revision to the level of sales in January 2025 and a 1.7ppt cut to the April estimate. The new profile looks more credible, but it’s hard to have much confidence in the data when such fundamental errors have been made, and the revisions are so significant.
Retail analyst Nick Bubb, a long-time critic of the numbers produced by “Planet ONS”, has concerns about its non-seasonally adjusted data (which hasn’t been revised today):
The City expected a modest 0.2% increase in month-on-month seasonally adjusted sales volumes, so the 0.6% increase should please economists (although our friends at Capital Economics have said, in response, that “talk of tax rises ahead of the Budget may yet hold back retail and housing”), but there will be more interest in the big changes in the ONS ‘seasonal adjustment’ techniques, which means, for example, that the bizarre 2.8% dip reported for May has now been revised to a drop of only 1.0%, while the 1.7% increase in April has now been revised down to a 0.4% fall...
“Supermarkets had the largest contribution to headline correction and revision over the last 12 months’, according to the wretched ONS, but it also says, disappointingly, that ‘retail sales non-seasonally adjusted data are unaffected by this, as they refer to raw data where the effects of regular or seasonal patterns have not been removed’.
For us the main problem has always been the accuracy of the underlying sales value figures and our concerns have not been addressed: the Small Retailer sales figures in general have looked too optimistic for some time (implying sampling problems) and the Large Food Retailer sales figures in particular still look much too low in recent months (implying a lack of common sense at the ONS, in terms of cross-checking the widely available industry figures from the BRC-KPMG, as well as Kantar Worldpanel and NIQ).
Updated
UK retail sales in July were lifted by the women’s European football tournament,
The ONS reports that non-store retailers and clothing stores sales volumes grew strongly in July 2025.
Retailers attributed this to “new products, good weather, and an increase resulting from the UEFA Women’s EURO 2025 tournament”, which Wales and (winners!) England both took part in.
Following its corrections, the ONS has revised down the quarterly growth rate of retail sales from 1.3% to 0.7% in Q1 and up from 0.2% to 0.3% in Q2.
This will have a slight impact on the UK’s growth data for the first quarter of 2025.
ONS director-general James Benford explains:
Retail sales is used to measure the output of the retail sector and part of household expenditure. It accounts for 4.8% of GDP.
This means that the contribution of retail sales to GDP growth has been revised down from 0.06pp [percentage points] to 0.03pp in the first quarter and is unrevised to two decimal places in the second quarter.
These small corrections will be incorporated into GDP with the Quarterly National Accounts release at the end of September.
But as things stand, that shouldn’t lead to a downward revision to growth. The ONS says:
Despite the change in contribution, and all else being equal, GDP in Quarter 1 2025 would have been unchanged to 1 decimal place at 0.7%.
Updated
ONS's director-general apologises for retail sales error
The ONS’s director-general has apologised for the error discovered in the UK’s retail sales data (see earlier post), and the two-week delay getting today’s report.
James Benford, who was parachuted into the statistics body this year to lead its turnaround plan, explains that the approach to seasonal adjustment of retail sales is “unusually complex”.
He says, in a blogpost:
I apologise both for the delay to this release and the error in how we have been seasonally adjusting these data.
Benford adds that the ONS will conduct “a full lessons-learned exercise” and improve its processes and procedures to make sure the error will not be repeated.
But what exactly went wrong? Benford explains that the ONS failed to match its data to the reporting practices of retailers (such as supermarkets),
Many retailers report their sales on a ‘retail calendar’ basis which split the year into planning and reporting periods that have the same number of weekends, which tend to have a larger percentage of sales, and consistently align holidays and shopping events, such as Easter and Black Friday, each year. Reflecting that, our retail sales figures are collected for blocks of four weeks, four weeks and then five weeks (a ‘4-4-5′ approach) and can both sit within a month or span multiple months. This adds complexity to our seasonal adjustment process, given the need to align the collected data to calendar months. The process is complicated further by the pattern of the blocks of four and five weeks sometimes changing.
Our review revealed that we had not seasonally adjusted data correctly because we did not properly account for the adjustment in retail reporting calendars. We have now corrected for this mistake.
Halifax: house prices at record high
UK house prices have hit a new record high, lender Halifax has reported this morning.
Halifax’s house price index shows that prices rose by 0.3% in August, the third monthly rise in a row.
That lifted the average property price to £299,331, a new record high.
Amanda Bryden, head of mortgages at Halifax, says:
“The story of the housing market in 2025 has been one of stability. Since January, prices have risen by less than £600, underlining how steady the market has been despite wider economic pressures.
Affordability remains a challenge, but there are signs of improvement. Interest rates have been on a gradual downward path for nearly two years, and many of the most competitive fixed-rate mortgage deals now offer rates below 4%.
Combined with strong wage growth – which has outpaced house price inflation for nearly three years – this is giving more prospective buyers the confidence to take the next step. Summer is typically a quieter period for the market, so the recent rise in mortgage approvals to a six-month high is an encouraging sign of underlying demand.”
However, rival lender Nationwide reported earlier this week that house prices fell in August, as high mortgage costs dampened activity, so the picture isn’t entirely clear….
ONS reveals error with its seasonally adjusted retail sales
Newsflash: Britain’s blundering statistics body has revealed another mistake with the data it produces to track the UK economy.
The Office for National Statistics has admitted that it has discovered an error in the way it produces seasonally adjusted British retail sales data.
The blunder relates to the treatment of “calendar effects”, such as the timing of Easter (which moves between March and April), and to the way that its default data collection periods are aligned to calendar months.
[The ONS uses default data collection periods on a four-week, four-week, five-week cycle, which then need to be aligned to calendar months].
ONS basically say the reason for the issues with quality assurance was seasonal adjustment by calendar month rather than trading month (the 4-4-5 split). ONS say they will switch to calendar month collection at the end of 2026.
— Harvir Dhillon (@HarvirDhillon) September 5, 2025
This error forced the ONS to delay the release of the retail sales data – they were initially due two weeks ago.
The ONS, which insists seasonal adjustment is important, reveals that the treatment of these holiday effects and “phase shift” effects were not properly accounted for between January and May this year.
The corrections mean that retail sales were actually lower than previously recorded in January, February, April and June, this chart from the ONS shows:
These errors are another embarrassment to the Office for National Statistics; back in June, a report exposed “deep-seated” issues at the statistics body, which has been struggling to produce data on the state of the labour market too.
Today’s data also shows that the volume of goods bought by shoppers fell by 0.6% in the three months to July 2025 when compared with the three months to April 2025.
But in July alone, retail sales volumes are estimated to have risen by 0.6%, following an increase of 0.3% in June 2025.
Updated
Introduction: US jobs report in focus
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
All eyes will be on the US employment market later today, for signs that America’s jobs market is cooling.
The latest non-farm payroll data is expected to show a slowdown in hiring – economists predict a rise of 75,000 in August. That would be slightly higher than the disappointing 73,000 increase reported in July – which spurred Donald Trump to fire the head of the Bureau of Labor Statistics
The US unemployment rate is set to tick up to 4.3%, from 4.2%
Another weak jobs report would harden fears that the US economy stumbled over the summer, as Trump’s trade war created confusion and drove up costs.
That would make investors even more confident that the US Federal Reserve will cut interest rates next week.
So the markets could be volatile at 1.30pm UK time today.
Chris Weston of brokerage Pepperstone explains:
We know the Fed has placed weight on the NFP outcome, so naturally market players are fixated on it too. This suggests the period around payrolls will be messy from a price action perspective, with algos reacting immediately to the numbers and liquidity thinning out.
How markets ultimately react is tough to plan for — the first move may not be the final move. The clear tactical play is to hold out and put money to work in trades once the collective has had some time to truly digest the data, assess its implications for Fed policy, and consider whether it possibly fuels concerns that the Fed is behind the curve or even that the labour market is perhaps more resilient than feared...
The agenda
7am BST: Halifax house price index for August
7am BST: US retail sales data for July
9am BST: UN FAO‘s food price index
1.30pm BST: US non-farm payroll jobs report
