In early September 2025, U.S. economic data revealed multiple uncertainties, drawing widespread market attention. The recently released Non-Farm Payrolls (NFP) report once again highlighted the persistent weakness in the labor market. Although stock markets once hit record highs, they subsequently experienced significant corrections, reflecting investor concerns about the economic outlook. Meanwhile, gold prices broke through $3600 per ounce, while global long-term bond yields showed an upward trend, particularly for 30-year government bonds. The interplay between labor market weakness and bond market sell-offs reveals the complexity of the macroeconomic situation. This article will analyze these phenomena and explore their potential impacts.

U.S. Labor Market: Continued Slowdown

According to data from the U.S. Bureau of Labor Statistics (BLS), U.S. non-farm payroll growth in August 2025 was only 22,000 positions, far below the market expectation of 75,000. This data indicates that despite overall economic growth, the labor market continues to show weakness. The unemployment rate also edged up to 4.3%, the highest level in nearly four years. More importantly, employment growth has been slowing over the past few months. Since the beginning of 2024, the average monthly increase in non-farm payrolls has dropped from 200,000 to less than 100,000, and revised data shows that employment actually fell by 13,000 in June.

Furthermore, JOLTS (Job Openings and Labor Turnover Survey) data showed that job openings fell to 7.181 million in July, the lowest level since September 2024, also reflecting labor market weakness. The ADP report similarly indicated that private sector job growth in August was only 54,000, well below the expected 65,000.

These figures reveal a structural problem: although employment in healthcare and service sectors saw growth, manufacturing, retail, and construction sectors faced significant job losses. Overall, labor market demand is severely insufficient, and this aligns with long-term trends, suggesting that the resilience of the U.S. labor market may be far weaker than previously expected.

Global Bond Market: Multiple Pressures Driving Yield Increases

In contrast to the weakness in the U.S. labor market, there is a sell-off in global bond markets, particularly evident in rising long-term government bond yields. This phenomenon is not due to a single cause but results from a combination of technical, fiscal, and inflation expectation factors. For example, the U.S. 30-year Treasury yield once approached 5%, while long-term bond yields in Europe and Japan also rose simultaneously.

First, Dutch pension reform is a significant factor. Starting in 2025, the Netherlands shifted its pension system from a defined-benefit model to a defined-contribution model. This means pension funds no longer need to purchase large quantities of long-term bonds, leading to reduced bond demand and pushing yields higher. This change not only affects the Netherlands but could also impact the entire Eurozone. Consequently, Germany's 30-year bond yield rose to its highest level since 2011.

Second, global fiscal deficits are exacerbating pressure in bond markets. The UK's fiscal deficit has exceeded 5% of GDP, and its 30-year gilt yield reached its highest level since 1998. France's fiscal deficit is also continuing to widen, projected to reach 5.6%-5.8% of GDP in 2025. This creates greater uncertainty in European bond markets.

Furthermore, inflation expectations are intensifying tensions in the bond market. The U.S. inflation rate remains around 3%, and July's core PCE inflation reached 2.9%, well above the Federal Reserve's target. Meanwhile, Japan is also facing increased inflationary pressure; although July's CPI fell to 3.1%, it remains above the Bank of Japan's 2% target. With global population aging accelerating, wage pressure is becoming more evident.

Market Reactions and Policy Outlook

The weakness in the U.S. labor market and rising global bond yields have jointly triggered significant market volatility. Gold prices surged to $3600 per ounce driven by safe-haven demand, while the U.S. Dollar Index fell to a 16-month low. The stock market reaction has also been complex; the S&P 500 initially rose but soon corrected, reflecting market uncertainty about the economic outlook.

For the Federal Reserve, the latest economic data has strengthened expectations for interest rate cuts. The Fed is expected to cut rates by 50 basis points at its September meeting and may implement further easing measures in the coming months. Additionally, upcoming CPI data will be crucial; if it comes in lower than expected, it could prompt more substantial rate cuts.

Conclusion

The weakness in the U.S. labor market and the rise in global bond yields reveal the complexity of the current macroeconomic environment. Insufficient demand and structural issues are evident in the U.S. labor market, while pressures in the global bond market stem from a confluence of multiple factors. As the economic cycle evolves, risk premiums in the bond market are rising, and the persistent weakness in the labor market could negatively impact consumer spending. In this context, policy intervention appears particularly important, and central bank easing policies might support an economic soft landing.