Email
\n <\/a><\/p>\n
Link<\/p>\n
\n The bad news in last Friday\u2019s jobs report<\/a> may have been overshadowed when President Donald Trump fired the commissioner in charge<\/a> of producing it. But economists haven\u2019t forgotten about America\u2019s job market \u2013 and they\u2019re growing concerned.\n <\/p>\n \n Some of the jobs report data has economists using a word they haven\u2019t uttered in several months: recession.\n <\/p>\n \n Hiring over the past three months slowed dramatically, creating problems<\/a> for the economists and statisticians at the Bureau of Labor Statistics<\/a> whose job is to make sense of the payroll data they get from thousands of businesses across the country. As new data came in about May and June\u2019s employment, the BLS was forced to sharply lower those months\u2019 job totals from their preliminary estimates.\n <\/p>\n \n The BLS revised May and June\u2019s jobs totals lower by a combined 258,000 jobs. That massive revision gave economists some serious agita. Larger revisions have happened before, but every time changes that large have taken place over the course of at least two months, the US economy has been in a recession \u2013 at least since records began in 1968.\n <\/p>\n \n \u201cThe job market is terrible,\u201d said Douglas Holtz-Eakin, former director of the Congressional Budget Office during the George W. Bush administration. \u201cOutside of education and health, the economy has lost private sector jobs in the past three months. That\u2019s terrible.\u201d\n <\/p>\n \n The US economy has added an average of just 85,000 jobs per month this year, which is well below the 177,000 jobs that the economy added on average each month before the pandemic.\n <\/p>\n \n Poor jobs data doesn\u2019t mean the US economy is in or going into a recession. Several recent economic indicators are pointing in the wrong direction \u2013 weakness in second-quarter gross domestic product and slower-than-expected growth in both the manufacturing and services sectors, for example. But, importantly, the National Bureau of Economic Research, which is responsible for declaring recessions, tracks four big indicators of economic activity \u2013 consumer spending, personal income, factory production and employment. None have been pointing to a recession or even that the US economy is on the precipice of a recession.\n <\/p>\n \n That is, until Friday\u2019s jobs report. Yet even the recession alarms it sounded come with some caveats. Recent moribund job growth was likely distorted by business uncertainty surrounding Trump\u2019s tariffs, and it\u2019s too early to tell whether it will rebound or continue to remain at this low level, noted Keith Lerner, co-chief investment officer at Truist.\n <\/p>\n \n \u201cThe US economy is in a muddle-through environment,\u201d said Lerner, who said the Federal Reserve probably needs to take action to lower interest rates soon because the jobs report suggests it might be behind the curve.\n <\/p>\n \n The Fed has known about the slowing hiring for quite some time. But the sharp pullback over the past few months \u2013 data the Fed didn\u2019t have when it made its decision last week to hold interest rates steady \u2013 probably means the economy is considerably weaker than economists had expected.\n <\/p>\n \n \u201cFriday\u2019s jobs report was terrible with recessionary level numbers, but slowing hiring is not new,\u201d said Robert Ruggirello, chief investment officer, Brave Eagle Wealth Management. \u201cWhile Friday\u2019s report does not mean we are entering a recession, it shows that companies are freezing hiring and firing until there is more policy certainty and business confidence.\u201d\n <\/p>\n \n Ironically, the leading culprit for slowing jobs growth may be the thing that has been holding the Fed back from cutting rates: Trump\u2019s tariffs. The Fed had been in wait-in-see mode in case tariffs pushed prices higher. The flip side is that the US economy appeared strong enough to handle higher interest rates.\n <\/p>\n \n But it seems businesses are no longer waiting. They\u2019re freezing hiring and changing their investments as they grow fearful that tariffs could raise costs and hurt the economy.\n <\/p>\n \n \u201cThe president\u2019s unorthodox economic agenda and policies may be starting to make a dent in the labor market,\u201d said Chris Rupkey, chief economist at FwdBonds. \u201cBusinesses are not waiting as they are cutting back on the numbers of new workers they bring on board, which means we can no longer count on the employment markets to be a positive factor supporting economic growth in the weeks and months ahead.\u201d\n <\/p>\n \n Trump\u2019s immigration policy appears to be taking a toll, too. Since April, 1.4 million people dropped out of the US labor force \u2013 802,000 of whom were foreign born.\n <\/p>\n \n That may have helped make the jobs report look slightly better than it actually is. Because of the way the survey was taken, if the 503,000 who dropped out of the labor force but still wanted to work had told the BLS that they were actively searching for a job, the unemployment rate would have risen to 4.5% last month, Rupkey said. Instead, it rose to 4.2%.\n <\/p>\n \n The revisions, though surprising for their sheer size, were not fully unexpected. They align with the other inputs that analysts have been tracking, Goldman Sachs economists said in a note to clients Saturday, and they help paint a clearer picture of the economy.\n <\/p>\n \n Other key jobs indicators \u201chave slowed significantly in recent months,\u201d wrote Goldman Sachs economist Jan Hatzius. \u201cTaken together, the economic data confirm our view that the US economy is growing at a below-potential pace.\u201d\n <\/p>\n \n In other words, Goldman Sachs isn\u2019t shocked by the revisions. If anything, they fit with the broader puzzle pieces.\n <\/p>\n \n The revisions were \u201cundeniably concerning,\u201d Bank of America economists said in a note to investors Monday. But the \u201csilver lining\u201d is that a considerable amount of the revisions had to do with seasonal adjustments \u2013 basically algorithms that needed adjusting as new data came in.\n <\/p>\n \n The BLS considers its initial jobs numbers to be preliminary when they\u2019re first published, because some respondents fail to report their payroll data by the BLS\u2019 deadline. Low survey responses can make the report more challenging to estimate. But the BLS continues to collect the payroll data as it\u2019s reported, and it revises the data accordingly.\n <\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2025\/08\/gettyimages-2216856716.jpg\")
<\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2025\/08\/2025-08-05t041407z-1412457557-rc2r0gai879e-rtrmadp-3-usa-trump-tariffs.JPG\")
<\/p>\n