All said and done, the United States economy added just 22,000 jobs during the month of August. This disappointing figure not only fell short of economists’ projections, but highlighted the persistent crises in the labor market. The unemployment rate surged to 4.3%, the highest rate since October 2021’s 4.5%. This disappointing report has raised concerns about the broader economic landscape and has drawn criticism from various political figures, including former President Donald Trump.
In each of the past three months, job growth has essentially flatlined, with the economy adding an average of just 500 jobs over the last three months. The August jobs report reflects a slowdown in employment growth to its weakest pace since the early days of the Covid-19 pandemic. In particular, economists had expected job creation to be much stronger. This disappointment comes on the heels of growing concern over the state of the U.S. economy.
According to the report, industries that produce goods were hit particularly hard, losing 25,000 jobs. All levels of government were hit, losing 16,000 jobs. This unfortunate downturn comes at the same time as deeply concerning pronouncements from states across the country. For example, Maryland just announced their plan to furlough state employees. Manufacturing—a sector where Donald Trump had vowed to reinvigorate jobs—has seen declines, raising questions about the effectiveness of his economic policies.
Second, wage growth already seems to be stalling, further piling on the existential threat to so many workers. With hours per employee still frozen in place, even workers with jobs may continue to struggle more and more to get by. This flatlining of wage growth adds even more fuel to the fire behind the cracks of strain currently showing in the U.S. labor market.
Combined with gains in other sectors, the state’s extrication from the pandemic recession was largely driven by healthcare and social assistance. They were up to an amazing 48,000 new jobs in August! While this expansion speaks to a durability in burger joints and taco shacks, it reflects the continued plight of cities’ now outsized fare at the industrial buffet.
The August jobs report has garnered heightened attention due to growing concerns about the American economy and instability within the government’s labor statistics bureau. This turbulence was exacerbated when Donald Trump made news by firing its new head, creating a perfect storm of uncertainty. Consequently, this report is being examined with a greater level of detail than the usual monthly reports.
Trump is clearly exasperated with the federal reserve’s unwillingness to reach into its well of powerful tools to inject more economic growth. This reluctance has fueled a contentious national debate. Critics of the administration, including Senator Elizabeth Warren, are touting today’s job numbers as a sign that Trump has failed on economic policy. She goes on to call these policies “disastrous” to American workers.
The latest job figures include revised data for June and July, with the estimate for July job creation slightly adjusted upwards to 79,000 jobs. All in all, even given these changes, the view is still one of a labor market that is really feeling the pressure.