“Trump’s arbitrary, capricious, and mercurial decisions about tariffs and everything else that affects the economy have made it impossible for employers to make even modest predictions about the future. So they won’t hire.” Robert Reich, Former U.S. Labor Secretary
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Total nonfarm payroll employment changed little in August (+22,000) and has shown little change since April, the U.S. Bureau of Labor Statistics (BLS) reported today. The unemployment rate, at 4.3 percent, also changed little in August. A job gain in health care was partially offset by losses in federal government and in mining, quarrying, and oil and gas extraction. BLS.gov
The Labor Department summary of the August unemployment report was misleading. There were lots of changes. Professor Reich, President Clinton’s former Labor Secretary, was just hinting at the damage Trump’s policies have wreaked since April 2 and the announcement of his tariff war on the rest of the world.
Job growth, for instance, since April has been a disaster. Revisions to past payrolls reveal that June private nonfarm payrolls lost jobs (-13,000) for the first time since the COVID-19 pandemic.
And the 22,000 total of new hires in August means that job growth has stagnated, since job growth is no longer keeping up with population growth, hence higher unemployment to come. The unemployment rate of 4.3% is a four-year high.
The Retail, Transportation, Education & Health, and Leisure/Hospitality sectors added a total of 88,000 jobs, which means that the rest of the economy lost -66,000 jobs, including the federal government (-14,000). It’s further evidence of the damage the DOGE government job cuts have done.
Consumers will be savings more and spending less for the holidays, which is a sign of slowing growth and even a recession, as I’ve been saying in past blogs.
Employers have stopped hiring because of the mostly illegal tariffs that may have to be refunded to importers, say the courts. The immigration raids are draining small businesses of workers, and the DOGE job reductions are cutting off the basic information that businesses need to operate; like weather predictions, medical information (vaccinations for babies and school kids).
There were never enough native-born workers to keep the job market growing, historically. It’s been the average one million per year influx of new immigrants that have filled the void of job vacancies historically.
Trump is also turning into Don Quixote with his irrational dislike of windmills. He is shutting down programs for future wind and solar power endangering future energy sources that AI will need to power the future economy.
There was other news that showed similar job weakness. The ADP, a private payroll processor, showed monthly payroll gain of just 54,000 jobs, down from 106,000 jobs in July.
And the U.S. JOLTS report of job hirings and separations was also negative for the first time since the pandemic. It estimates the actual number of monthly hirings and job losses. The number of people hired in July totaled 5.31 million, but the increase was almost entirely offset by 5.29 million “separations” —layoffs, job quitters, retirements, hence to real job growth.
This is while the Biden administration averaged 150,000 per month job increases during its four-year run.
The inflation component of stagflation is already happening, in spite of the Q2 jump in GDP to 3.1% that was mostly due to the drop in imports as the tariff taxes have begun to kick in.
“Trump promised to reduce prices, but prices continue to rise. Blame Trump’s tariffs. Prices for wholesalers rose at the fastest pace in three years in July, and those wholesale prices are now being passed on to retailers and consumers,” continued Professor Reich.
And consumers are also seeing rising inflation. The Personal Consumption Expenditures price index (PCE), the Federal Reserve’s preferred inflation gauge, rose 2.9% annually without volatile food and energy price changes, I said last week. That’s too high for the Fed’s target rate of 2% inflation that prevailed until the COVID-19 pandemic threw a monkey wrench in supply lines that are still recovering for most of the world.
The unemployment report is a huge eyeopener for Republicans who will attempt to explain it away as they did last month when Trump fired the head of the BLS that calculated the unemployment report. Job growth has quickly ground to a halt.
They and the American public will soon realize that allowing Trump’s massive tariffs without congressional consent isn’t working. It was a power play to increase his wealth and that of the Oligarchs that support him.
Harlan Green © 2025
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