“Total nonfarm payroll employment changed little in July (+73,000) and has shown little change since April. The unemployment rate, at 4.2 percent, changed little in July. Employment continued to trend up in health care and in social assistance. Federal government continued to lose jobs.” BLS.gov
The Labor Department’s unemployment report actually understated what happened in July. The U.S. economy created 73,000 nonfarm payroll jobs, better than prior months when just 19,000 and 14,000 payroll jobs were created in sharp revisions to May and June totals as more data was available.
The change in total nonfarm payroll employment for May was revised down by 125,000, from +144,000 to +19,000, and the change for June was revised down by 133,000, from +147,000 to +14,000, per the BLS.
The main reason? It’s estimated that as much as than one million immigrants left the adult workforce, many of them running for cover because of the Gestapo tactics of Trump’s Homeland Security masked Storm Troopers breaking into homes and businesses to round up as many undocumented immigrants as possible.
It’s really the first indication of the immigrant’s importance in our economy, and why most of July’s hiring was in healthcare (55,000) while government employment lost 12.000 jobs and -87,000 jobs this year. The manufacturing and wholesale trade sectors also lost jobs.
Since January, some 402,000 people have left the "civilian labor force." That is, they don't have a job and are no longer looking for one, reports MarketWatch’s Jeffry Bartash.
A separate number, called "not in labor force," is even worse. The total has risen by 1.5 million in the first seven months of 2025, an unusually large increase. The last time the economy experienced a similar phenomenon, excluding the pandemic era, was during the recession of 2007-09.
The Trump administration has not been creating many jobs since January, with 158,000 jobs its high point added in April, vs. 323,000 payroll jobs added in December 2024, the last month of the Biden administration, and it’s been downhill for Trump since then (see graph).
In fact, it looks like the Trump administration is doing everything in its power to discourage businesses from hiring as Trump continues to waffle on trade agreements in attempting to look strong when in fact it’s a sign of weakness.
It should be obvious now that he is desperate to levy higher import taxes on as many countries as possible to pay for the huge increase in federal debt caused by his big, beautiful tax cuts.
The weak job report should mean the Fed will initiate interest rate cuts in September, if not sooner, if the job market continues to deteriorate. Fed Chair Powell has said that their main concern is a healthy job market and it doesn’t’ look like this can happen with so many leaving the working population.
Longer term interest rates have plunged on the jobs news, anticipating lower inflation ahead because of the weak job reports, which makes it even easier for the Federal Reserve to ease credit conditions.
Trump’s tax cuts while pushing for lower interest rates to compensate for the economic damage his tariff wars will cause are part of the Republican playbook. And Trump has declared a tariff war on the whole world with no idea of the havoc it will create for the world’s economies, much less ours.
This may be the first sign of what is to come.
Harlan Green © 2023
Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen
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