Federal Reserve policymakers look set to kick off a series of interest-rate cuts this month to shore up an increasingly fragile job market, after a government report Friday showed job gains last month skidded to a near stop, and the unemployment rate rose.

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While Fed Chair Jerome Powell is likely to interpret the addition of a paltry 22,000 jobs last month with caution, given the drop in immigration, the tick up in the unemployment rate to 4.3% — the highest since October 2021 — will raise some alarm bells.

With employers hiring only slowly, Powell said last month, any increase in what has been a very low rate of layoffs could lead to a sharply higher jobless rate. More than a quarter of those out of work have been looking for a job for more than 27 weeks, Friday's data showed. And while the Fed will get fresh inflation data next week before its September 16-17 policy-setting meeting, analysts say concerns about labor-market deterioration are now on the front-burner.

"A weaker-than-expected jobs report all but seals a 25-basis-point rate cut later this month," said Olu Sonola, head of US Economic Research at Fitch Ratings. "Near term, the Fed is likely to prioritize labor market stability over its inflation mandate, even as inflation drifts further from the 2% target."

After the report, futures tied to the Fed's policy rate reflected about a 10% chance of a half-point interest-rate cut this month, up from zero before the report, though the majority of bets centered on a quarter-point rate reduction, with similar-sized cuts at each of the next Fed policy meetings.

Pricing also reflected about a 45% chance that by January the short-term benchmark rate will be in the 3.25%-3.50% range, a full percentage point below where it is today — either because the Fed chooses to start this month with a bigger-than-usual half-point rate cut, or because it delivers a quarter-point cut in each of next four meetings.