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US employers added just 73,000 jobs last month, and a revision to the Labor Bureau showed that employment is far weaker than previously reported in May and June. The unemployment rate reached a maximum of 4.2% from 4.1%.
The worsening job market is being done in businesses paralyzed by uncertainty over President Donald Trump’s unstable trade policy.
The Labor Bureau reported Friday that the revision had shaved 258,000 stunning jobs from its payroll calculations in May and June.
The stock market has fallen into the news.
However, there are subtle indications that the labour market has been weakening for months.
New university graduates are struggling to enter the job market. Unemployment rates for college graduates aged 22-27 reached 5.8% in March, the highest since 2012 except for the pandemic, far exceeding the national unemployment rate.
Many Americans stay at work and don’t want to start work, so this is because they believe it’s the better you get, and there’s more evidence that they’re right.
The current situation is a sharp turnaround from the employment boom three years ago, when desperate employers signed bonuses and introduced perks like freedays off, fertility treatment, and even pet insurance to recruit and retain workers.
Employers added an average of 130,000 jobs a month by June, down 23% from last year’s employment, 68% below the 2021-2023 average, when the economy returned from COVID-19 lockdown.
Job market metering is the prolonged impact of higher interest rates used by the Federal Reserve to combat inflation. President Donald Trump’s massive import taxes and the costs and uncertainty they are leviing on businesses. And the expected decline in foreign workers as the president’s massive deportation plan advances.
Gregory Daco, chief economist at Ey-Parthenon, wrote in this week’s commentary. “We see employment growth falling far below trend in the coming months.”
Still, most American workers enjoy an extraordinary level of job safety. The number of Americans applying for unemployment benefits (representative for layoffs) remains at a health level.
However, Vanguard senior economist Adam Schickling warns that “the unemployment rate is low and the pace of layoffs underlie a sluggish debilitating.”
In commentary on Tuesday, Sickling said that job market health can be a matter of individual perspectives… For registered nurses, you might believe that job market health is excellent. Unemployment rates for experienced health workers are currently below 2%.
The percentage of people leaving their jobs — signs they are sure they can land better — has fallen from record highs in 2021 and 2022, and is where they were now standing before the pandemic.
For one thing, employment is concentrated in a small number of industries. So far, private employers in the United States, for example, have added 644,000 jobs. Of these, around 405,000 (63%) were just one of the industry categories in the labor sector. This is healthcare and social assistance ranging from hospitals to day care centers.
Jobs have cooled over the past few years, making it difficult for young people and the workforce to find jobs again for employment, and the spells of job hunting and unemployment have been extended. The Labor Bureau said the number of discouraged workers they believe their jobs are unavailable increased by 256,000 to 637,000 in June.
“Historically, the decline in recruitment has been accompanied by a rapid increase in layoffs, a one-to-two punch that raises unemployment,” writes Sickling in the commentary. “The labor market today is against that pattern.”
One reason is that manufacturers that tend to trigger with layoffs as soon as the economic situation weakens, tend to take on a smaller share of American employment. “So there’s not much people to cut,” he said.
Conclusion: “Companies are pulling jobs back without throwing away the existing workers in a significant number,” Sickling said.
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