Employers are facing economic uncertainty as a result of tariffs imposed by US President Donald Trump and a labor market softening as a result of the immigration crackdown.
The US Department of Labor released a report on Friday, the latest indication of a slowing trend in the labor market, which added 22, 000 jobs in August while the unemployment rate increased by 4.3 percent.
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Social assistance and healthcare are the only industries to see significant growth, adding 16 000 jobs and adding 16 000.
In the categories of leisure and hospitality, there were less dramatic increases reported. These advancements, which included losses in 15, 000 federal government jobs, 12, 000 manufacturing jobs, and 6, 000 in oil and gas extraction, were partially offset by losses in other fields.
“Another poor jobs report as a result of tariffs. It’s becoming more obvious that tariffs are having an impact on hiring and employment as a result of the revisions. According to Skanda Amarnath, executive director of Employ America and former Federal Reserve economist, “manufacturing jobs are declining sharply, as are other trade-sensitive sectors, such as mining and wholesale trade,” in a note released to Al Jazeera.
The July report’s content was slightly revised, adding 79, 000 new jobs to the original 73, 000. June’s figures, however, were cut sharply, from 14, 000 jobs added to 13, 000 lost.
Jobs dropped in June after all the revisions are finished. Without the effects of natural disasters, recessions, or the times that come with them, Amarnath said.
White House economic adviser Kevin Hassett claimed the August figures were “disappointing,” but that he anticipated improvements from revisions in the months to come.
Broader slowdown
This week’s weak indicators, which include a cooling labor market, are added by the August report.
According to the latest job openings and labor turnover survey, vacancies have fallen to their lowest levels since the COVID-19 pandemic first appeared on Wednesday. For the first time since April 2021, there are now more unemployed people than job openings.
The hiring of employees in the private sector has also decreased. In August, according to the ADP National Employment Report, payrolls increased by 54, 000 from the previous month’s 106, 000. Government positions are not included in the ADP survey.
The ADP’s chief economist, Nela Richardson, stated in the release that “the year started with strong job growth, but that momentum has been stifled by uncertainty.”
Additionally, there are more layoffs. In August, according to a report from Challenger, Gray &, Christmas, job-related job cuts increased by 39 percent compared to the same period in July, with US employers slashing more than 85, 000 positions. That increase is 13% over the prior year. Employers have eliminated more than 892, 000 jobs this year, which is the highest number since 2020.
Political repercussions
After the bureau drastically revised the May and June payroll figures, Trump fired BLS Commissioner Erika McEntarfer, who had previously received the weak data.
According to Angela Hanks, director of policy programs at The Century Foundation, “This jobs report also confirms what we already knew: that President Trump’s firing of BLS Commissioner Erick McEntarfer was de facto a case of shooting the messenger.”
McEntarfer will be replaced by EJ Antoni, the head economist at the far-right conservative think tank Heritage Foundation. Prior to this, Antonioni suggested completely suspending the monthly jobs report.
Fed in focus
Less than two weeks before the US Federal Reserve’s upcoming policy meeting, the latest employment figures are released. When setting interest rates, the central bank closely monitors job data to balance persistent inflation against labor market weakness.
Fed Chairman Jerome Powell has been repeatedly asked to lower rates by the White House. The September 16 and 17 meeting will have a cut, which is expected to be the first since December.
The unsatisfying jobs report caused US markets to decline. The Dow Jones Industrial Average is 0.75 percent below the market’s opening at 11am New York (15:00 GMT), and the S&P is down 0.8%.
