Earlier this week, economic forecasters predicted that this August employers added around 80,000 workers to their payrolls. But according to Friday’s report from the Bureau of Labor Statistics, employers added only 22,000 workers. In addition, though July’s payroll data was revised slightly up, June’s was revised downward to a loss of 13,000, marking the first month of job losses since December 2020. And because the labor market is downstream of other economic indicators, August’s report means that the economy could already be in trouble.
Alongside slow hiring, August’s unemployment rate ticked up to 4.3%, the highest rate in four years. That means there are 3 million more people out of work than there were a year ago. Of those unemployed, 1.9 million are long-term unemployed: out of work and searching for a job for at least six months. That’s an increase of 385,000 from August of last year. Data from the 1960s through today shows that fast-rising long-term unemployment has been associated with recessions.
The administration’s economic agenda is driving up uncertainty and making everyday decisions for American businesses and consumers more difficult.
The job market is especially tough for younger workers. Among workers ages 20 to 24, the unemployment rate jumped to 9.2% in August, the highest since May 2021. Because the demographics in the report are based on a survey of households, specific age brackets have small sample sizes, and thus the numbers tend to be more volatile. Nevertheless, this doesn’t bode well for new labor market entrants.
After last month’s similarly anemic report, President Donald Trump claimed that the jobs numbers were “rigged” and fired Bureau of Labor Statistics Commissioner Erika McEntarfer. But the facts don’t lie — and the data is reliable even with the firing of the BLS commissioner, at least for the moment. There have long been safeguards to protect the data. The process is highly automated and relies on dozens of career staff; the commissioner is the only political appointee at the BLS. While budget cuts at the bureau have also created concerns about data quality, for now, the system has guardrails.
Rather than blame the BLS, Trump should blame himself. His policies are creating challenges on both the supply and demand sides of the economy, affecting Americans in their roles as workers as well as consumers. To zoom in a bit more — the population of immigrant workers has declined by 1.2 million since January, creating constraints in certain industries ranging from agriculture to construction to child and other care services. Already, 26 states have reported declines in construction employment and major project delays due to labor shortages. This means home prices — which are hardly low at the moment — could skyrocket. Slowed infrastructure will cause roads to go unfixed and factories to remain unbuilt. Restaurants will struggle to find staff.
The administration’s economic agenda is driving up uncertainty and making everyday decisions for American businesses and consumers more difficult. Businesses can’t plan ahead, the manufacturing sector has shrunk for six straight months, and American workers are paying the price. A few months ago, Trump refused to rule out a potential recession, but predicted his policies “should be great for us.” This is far from “great” for working families. The labor market conditions won’t be made any easier to endure with Trump’s budget law, which gutted the programs intended to help Americans during economic volatility. The law strips millions of health care and food assistance and drives up utility bills, all while giving a permanent tax cut to the wealthiest Americans. The labor market conditions won’t be made any easier to endure with Trump’s budget law. Whether we’ll continue to have reliable data from the BLS is an open question as well. Trump’s nominee to replace McEntarfer — E.J. Antoni — has urged officials to take a chain saw to the BLS and suggested we suspend the jobs report altogether. If that weren’t concerning enough, on Friday, National Economic Council Director Kevin Hassett assured the nation that “next month” the data will be revised upward. Trump inherited an economy that saw $1 trillion in private investment in manufacturing, a historic streak of low unemployment, and an inflation rate that had come down from pandemic levels. Instead of building on an economy dubbed the “envy of the world,” he’s sowed seeds of mistrust in the data as he pursues an agenda that only ensures the rich get richer. Friday’s report didn’t just show a stalling job market. It reinforced what we have seen time and again: The Trump administration has an antiworker agenda and it’s trying to pretend otherwise.
Heather Boushey
Dr. Heather Boushey is a senior research fellow at the Reimagining the Economy Project at the Harvard Kennedy School. She previously served on the White House Council of Economic Advisers and as the chief economist for President Biden’s Invest in America Cabinet. 
