The latest U.S. nonfarm payrolls report painted a bleak picture of the labor market, with downward revisions confirming that the Trump economy shed jobs for the first time since the pandemic.
Some economists argue that the underlying trends are even worse than the headline numbers suggest.
U.S. employers added just 22,000 jobs in August, while manufacturing companies cut 12,000 positions, according to the Bureau of Labor Statistics.
Meanwhile, June payrolls were revised down by another 27,000, marking the first monthly net job loss since 2020.
“The Trump economy is worse than Biden’s, with a weak labor market and rising inflation,” economist Peter Schiff wrote Friday.
“The labor market has not been this weak since the depths of the [Global Financial Crisis] and the 2020 pandemic lockdowns,” he added in a separate post.
Economist Adam Kobeissi also highlighted the deterioration, noting that all of August’s job gains came from part-time positions. Meanwhile, the economy shed 357,000 full-time jobs.
“Millions of Americans are piling into part-time jobs because it’s all they can get,” Kobeissi wrote.
A “white-collar and a blue-collar jobs recession”
The latest jobs report points to what Navy Federal Credit Union chief economist Heather Long described as a “white-collar and blue-collar jobs recession.”
Unemployment rose to 4.3%, a shift Bloomberg economists flagged as evidence that rate cuts are all but inevitable later this month.
“Though headline nonfarm payrolls may be overstating the weakness in hiring, the uptick in the unemployment rate suggests labor demand is weakening faster than supply,” wrote Bloomberg economists Anna Wong, Stuart Paul and Estelle Ou.
They argued the report effectively locks in a cut at the Federal Reserve’s Sept. 16–17 policy meeting. Fed funds futures echoed that view, pricing in nearly a 90% probability of a reduction.
For the central bank, the challenge is shifting focus from inflation to a cooling labor market, even as consumer prices remain stubbornly high.
As InvestorsObserver reported, Chair Jerome Powell has quietly acknowledged the risk of stagflation, with joblessness rising alongside still-elevated inflation.
The core Personal Consumption Expenditures (PCE) index — the Fed’s preferred measure of inflation — ticked up to a 2.9% annual rate in July, government data showed.
It has now remained above the Fed’s 2% target for more than four years.
Against that backdrop, market strategist Charlie Bilello warned the Fed would lose “all credibility” if it cuts rates before fully addressing inflation.
Your email address will not be published. Required fields are markedmarked