Friday’s employment report surprised many, revealing a softer job market in the U.S. Employers added fewer jobs than expected, and previous numbers were adjusted downward. According to Gregory Daco, an economist from EY-Parthenon, May and June added only 19,000 and 14,000 jobs, respectively—showing minimal growth.
This latest data highlights ongoing challenges in the job market as companies face uncertainties from trade deals and tax laws. Many businesses seem to be holding off on hiring due to a lack of clarity about future conditions. Laura Ullrich, a director at Indeed, mentioned that many employers were preparing for a stagnant jobs report, which indeed came true.
The job market isn’t in freefall, but it’s not expanding either. This stagnation impacts those looking for work, with the number of people searching for jobs for over 27 weeks rising by 11% from last year, now at 1.8 million.
Despite these challenges, there are areas showing growth. Health care and social assistance added a noteworthy 73,300 jobs last month. However, other industries like leisure and hospitality, transportation, and construction saw little hiring or even job losses.
Recently, President Trump expressed doubts about the accuracy of the jobs report, claiming potential manipulation. He fired the commissioner of the Bureau of Labor Statistics, insisting the revised numbers were a significant mistake, though these revisions are a routine part of how employment data is reported.
Experts, including Heidi Shierholz from the Economic Policy Institute, criticized this view. Shierholz emphasized that job data results from meticulous work by numerous skilled professionals, adhering to strict methodologies.
### Business Hesitation and Tariffs
The uncertainty stemming from trade tariffs is making businesses cautious. Beth Hammack of the Federal Reserve Bank noted that many companies are unsure where to invest their resources. For example, instead of expanding, some franchise owners are opting to refurbish existing locations.
While the Trump administration aims for tariffs to support U.S. manufacturing, many manufacturers are feeling the pinch. Rising costs for materials like steel and aluminum are squeezing profit margins.
In July, the U.S. lost 11,000 manufacturing jobs, a disappointing trend for an industry that Trump pledged to revitalize. According to Scott Paul from the Alliance for American Manufacturing, this job loss reflects a long-standing stagnation in the sector.
### The Road Ahead
Experts warn that the path to recovery may be long. Even with settled tariffs, reshoring manufacturing jobs could take years due to construction and operational costs. Ullrich notes that some products may remain cheaper to produce overseas, creating a challenge for domestic manufacturing.
Heather Long, chief economist at Navy Federal Credit Union, highlighted the need for clarity on tariffs. Prolonged uncertainty can lead to further weak hiring and potentially layoffs in the future.
As we navigate these complexities, the job market showcases both challenges and opportunities, reaffirming the need for businesses and workers alike to stay adaptive in this shifting landscape.
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Employment, Donald Trump
