According to our most recent data from the Bureau of Labor Statistics (BLS), workers are experiencing a seismic shift across the US labor market. In August, the economy added a tepid 22,000 jobs. This is a major deceleration, following a lamentable trend seen during these latter summer months. As detailed in our post yesterday, the new employment situation report indicates that the unemployment rate has increased to 4.3%. That’s the highest rate overall since 2021.
To measure job growth by industry sector, the BLS conducts a monthly sample survey of employers. After all, the same agency had to go back and adjust its original employment report down—significantly—for the months of May and June. With these changes they cut nearly 250,000 new jobs. In particular, hiring numbers from May were revised down to a meager 19,000, and June turned out to be a loss of 13,000 jobs.
That fact adds up to a very disheartening scenario for the nation’s labor market. Although the healthcare sector had a robust increase of 31,000 jobs last month, other sectors like manufacturing actually lost jobs. Manufacturing jobs lost 12,000 in August and are down 78,000 on the year.
The unemployment rate is still a chasm along racial lines. As it stands, the unemployment rate for White Americans is 3.7%. For Black Americans, it has gone up to 7.5%, an increase from 6.1% in August of last year. This rapid racial job gap only adds to the uncertainty of the current US labor market.
In the real world, businesses are struggling with these numbers. At the same time, payroll firm ADP announced that private employers added 54,000 jobs in August. That doesn’t tell the whole story or at least the larger trends that the BLS data suggest.
Jerome Powell, Chair of the Federal Reserve, acknowledged the uncertainty surrounding economic policies and their potential long-term effects on employment. He stated, “There is significant uncertainty about where all of these policies will eventually settle and what their lasting effects on the economy will be.”
Nela Richardson, Chief Economist at ADP, noted that the year is off to a strong start in terms of job growth. Yet, a combination of things in now led to an unmistakable downturn. “A variety of things could explain the hiring slowdown, including labor shortages, skittish consumers and AI disruption,” she commented.
In political circles, former President Donald Trump criticized the BLS’s findings as “rigged in order to make the Republicans, and me, look bad.” This assertion underscores continuing jockeying over economic performance as it pertains to political storylines.
The backward adjustments for May and June reinforce a worrying downward trend in job creation. Just 19,000 jobs gained in May, and a loss of 14,000 jobs in June. Those numbers are the weakest level of job growth since the pandemic started.