Policymakers at the US Federal Reserve have been seeing signs in recent months that the labor market is cooling off. New employment figures from the Labor Department released on Friday back up their view, which is prompting fears of an economic slowdown.

The department's report says the unemployment rate for July rose to 4.3 percent, a 0.2 percent increase from the previous month. Companies slowed their hiring and added just 114,000 jobs, which was significantly lower than economists had been expecting. Wage increases also rose 0.2 percent from the month before, but that was slower as well.

The Fed has been trying to fight inflation by maintaining high interest rates. Many economists and investors are expecting it to cut the rates when the labor market shows signs of cooling off. The new jobs data is raising expectations that it will announce cuts at its next meeting in September.