Economic uncertainty casts shadow over June's solid jobs report
Why it matters: Hiring is solid, defying expectations that the worrisome macroeconomic backdrop — huge uncertainty about trade, immigration, and the fiscal outlook — would keep more employers on the sidelines.
But Thursday's Bureau of Labor Statistics report stops well short of giving an "all-clear" for the economy.
Beyond the headline, labor supply is dwindling and demand for workers is narrowing. These issues could plague the labor market in the months ahead.
By the numbers: Employment increased by 147,000 last month, surpassing the gain of 115,000 jobs forecasters anticipated. The unemployment rate edged down a tick to 4.1%.
The government revised up payroll figures for April and May, noting that employment in the prior two months was higher by a combined 16,000 than initially forecast.
The report showed that 80.7% of the prime-age population — those aged 25-54 — was employed, just 0.2 percentage point shy of the peak seen in this economic cycle.
Zoom in: Conditions look less cheery beneath the surface. The private sector added just 74,000 jobs in June, almost half as many as the previous month.
Jobs growth was overwhelmingly concentrated in state and local government, with less impressive gains in the most cyclical sectors — that is, those most exposed to the weakening economy.
State and local government added 73,000 jobs, offsetting the continued declines in federal government (-7,000) from DOGE-related layoffs. The other big gainer was health care, which added 39,000 jobs.
While the number of unemployed Americans fell, the labor force also continued to shrink for the second consecutive month, helping keep downward pressure on the unemployment rate. Another 130,000 workers exited the workforce in June.
What they're saying:"There are real weaknesses in the market — including concentrated job gains, slowing wage growth, and falling participation — that have persisted for months, and there are scant signs of those concerns fading anytime soon," Indeed economist Cory Stahle wrote Thursday morning.
The big picture: Stahle compared the current labor market to a sturdy tent, but one that is "increasingly held up by fewer poles."
Among those poles are structural forces, including a shortage of workers from America's aging population and the immigration crackdown.
There is also an "ongoing reluctance among employers so far" to layoff workers in masse, a scarring effect of the pandemic when it was impossible to find and train staff.
Yes, but: There are profound economic changes underway that look set to supersede those factors; the adoption of AI is already shifting employers' hiring plans.
President Trump is ending the era of free trade, making it more costly for businesses to get goods from overseas — a dynamic that will force a reckoning among companies about their other expenses, including labor.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Newsweek
2 hours ago
- Newsweek
Some Social Security Recipients Will See Wage Garnishment in Just Weeks
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. In roughly 20 days, some Social Security recipients could experience wage garnishment as a higher Social Security claw back rate returns. Roughly 2 million Americans owed money to the Social Security Administration due to overpayments in 2023, according to KFF and Cox Media group. Starting July 24, the higher wage garnishments will go into effect until the full overpayment has been resolved. Why It Matters President Donald Trump has implemented a wide range of changes to the Social Security Administration (SSA). In addition to ending the use of paper checks by October, Trump also appointed former Fiserv CEO Frank Bisignano as the new SSA commissioner. The Department of Government Efficiency also instructed the agency to cut 7,000 SSA jobs. For beneficiaries who have been mistakenly overpaid, losing Social Security benefits could have severe consequences on their ability to pay for basic necessities. Roughly 21 percent of married couples and 45 percent of single recipients rely on Social Security for 90 percent or more of their income, according to SSA estimates. A sign is seen outside a US Social Security Administration building, November 5, 2020, in Burbank, California. A sign is seen outside a US Social Security Administration building, November 5, 2020, in Burbank, California. VALERIE MACON/AFP via Getty Images What To Know In some circumstances, the SSA overpays Social Security recipients due to either miscalculations on their part or the recipient failing to update their earnings information. In March, the SSA said it would be bringing back its 100 percent claw back rate for Social Security recipients who were mistakenly overpaid by the government. During Joe Biden's presidency, that rate was set at 10 percent to allow seniors more breathing room to pay for their basic necessities. However, the SSA updated that garnishment rate to 50 percent in April. "When we determine an individual receiving Title II benefits is overpaid, we send them a notice requesting a full and immediate refund and inform them of their right to request reconsideration or a waiver of recovery," the SSA said in April. "We usually provide 90 days for the individual to request a lower rate of withholding, a reconsideration, or waiver." The 90-day period from the SSA's statement on April 25 ends July 24, meaning more than a million recipients could see their payments impacted. However, those who have been overpaid can file for an overpayment waiver. Form SSA-632BK asks for forgiveness for the overpayment if it was not your fault and it would create financial hardship. To get this approved, you'll need proof that repaying the money would create a significant hardship. Beneficiaries can also file Form SSA-561 to appeal the claim you were overpaid. Newsweek reached out to the SSA for comment via email. What People Are Saying Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "Most recipients don't realize they've been overpaid until they receive a letter from the SSA. Without regularly reviewing your earnings history and benefit statements, overpayments can go unnoticed. Even if the error wasn't your fault, you're still responsible for repayment—unless you appeal, request a waiver, or set up a payment plan within the 90-day period." What Happens Next The loss of income could be dire for many Social Security recipients who rely on the benefits for most if not all of their income. A recent report from Gallup found 86 percent rely on Social Security as a "major" or "minor" income source. "The consequences can be significant, especially for retirees living on a fixed income. With inflation still elevated, a 50 percent reduction in benefits could severely impact housing, food, and healthcare," Thompson said. "For many, Social Security is their only source of income—making these garnishments potentially devastating."
Hamilton Spectator
3 hours ago
- Hamilton Spectator
What if killing Canada's digital services tax is just the beginning for Donald Trump?
OTTAWA—Call it a prudent climbdown, a show of weakness, or an unavoidable concession. There are several ways to look at Prime Minister Mark Carney's 11th-hour decision to cancel the federal government's Digital Services Tax last weekend. But what if it's also a tangible example of exactly what Carney warned would happen? The Liberal leader won a minority government on April 28 with a pitch that no one was better placed than himself to protect Canada from Donald Trump. The U.S. president has mused about using 'economic force' to annex Canada. As if taunting or teasing this country, he questions why it exists, and keeps floating the prospect of it becoming the '51st state' of the U.S. Two days before the election, Carney spelled out how he understood all of this. 'The U.S. is trying to put economic pressure on us to gain major concessions, to the extreme of a level of integration of our countries that would impinge our sovereignty,' Carney said that day in King City, north of Toronto. Carney, in his final campaign conference, ruled out any prospect the U.S. would use military Flash forward to last week. There was Trump, posting on social media that Canada's incoming Digital Services Tax — a policy that would force American tech giants and other firms, including Canadian ones, to pay up — was nothing short of a 'blatant attack' on the United States. Trump declared he had cut off all negotiations to resolve the trade war that started earlier this year with his wave of tariffs on Canadian goods. In other words, Canada's most important commercial and military partner, the destination for 76 per cent of all exports last year , was willing to ditch talks and dictate terms that could jeopardize thousands of jobs and hundreds of billions of dollars in economic activity. All over a domestic policy the Americans didn't like. Barely 48 hours later, shortly before midnight on a Sunday, the government announced the tax was dead. Not only would Canada not implement the policy as planned, it would repeal the 2024 law that created it. Is this Trump using economic pressure to force Canada's hand? 'It is exactly that,' said Lawrence Herman, a veteran trade lawyer and special counsel with the firm, Cassidy Levy Kent. 'It's an example of, on a particular issue, how much pressure can be brought to bear to force Canada to abandon not only a policy, but a law that has been in force for 18 months.' In Herman's view, the decision looks like a 'significant retreat' by the government, which shows 'how dependent we are on a reasonable relationship' with Canada's largest trading partner. Other policies that Trump has complained about, such as the supply management system for dairy and poultry, could be next, he said. Pete Hoekstra, the U.S. ambassador to Canada, told the CBC this week that he has a 'strong belief' Canada could water down that system by changing a law designed to protect it if that becomes part of a new trade deal. 'It's not a particularly good start to this so-called new economic and security relationship,' Herman said. He was referring to Carney's stated goal of talks that are now continuing under an agreement struck at the Group of 7 summit in the Alberta Rockies last month to strive for a deal to redefine the relationship by July 21. Others have been harsher in their judgment. Lloyd Axworthy, a former Liberal foreign affairs minister, posted online that Carney was acquiescing to Trump in a way that contradicts his 'elbows up' mantra on the campaign trail. 'Forget any dreams of a more sovereign, self-directed Canada. We're doubling down on the corporate cosiness and U.S. dependency that's defined our last half-century,' he wrote on Substack. Axworthy did not respond to an interview request Thursday. For Jean Charest, a former Quebec premier who sits on the government's Canada-U.S. advisory council, the situation illustrates the 'chaos' of dealing with Trump, whose administration is grappling with trade talks and tariffs threats against most countries on the planet. This meant that Carney's government was operating 'in a world of very bad choices,' Charest said. Deciding to scrap the Digital Services Tax, in that context, was 'certainly a legitimate choice,' he said. 'We are not in an ordinary world of negotiations,' Charest added. 'It would be nice to think, 'You give, I give ... we compromise.' It doesn't work that way with Donald Trump, and we're making our way through this by trying to protect essentially what's the most important for us in the short term, and that's a negotiation that has some legs.' Charest noted that there was opposition inside Canada to the Digital Services Tax, which would have applied back to 2022 with a three per cent tax on Canadian revenues from digital services companies with more than $1.1 billion in global earnings and $20 million inside Canada. The U.S. also pushed back against the policy when Joe Biden was in power. David Pierce, vice-president of government relations with the Canadian Chamber of Commerce, said his business lobby group felt the Digital Services Tax should be paused. He also said it would have been wrong to proceed with it after the U.S. dropped a controversial provision from Trump's major budget bill last week: the so-called 'revenge tax' that would have hit the U.S. assets of foreign businesses and individuals. That decision came as the G7 agreed to exempt American firms from a co-ordinated effort to ensure corporations pay a minimum tax, which was 'absolutely a win' for the U.S. Even so, Pierce said Canada likely had no choice but to drop the policy, given Trump's exploitation of Canada's 'weakness' — its major economic reliance on trade with the U.S. 'We just hope that this now paves the way for a good renewed deal,' said Pierce. The ultimate goal of the federal government in that deal, at least publicly, has been to return to the terms of the Canada-United States-Mexico Agreement (CUSMA), which Trump signed in 2018 during his first term, after disparaging North American free trade as unfair to his country. That would mean lifting the rounds of tariffs Trump has imposed since the winter, with import duties tied to concerns about drugs and migration over the border, and others that Trump slapped on Canadian autos, steel and aluminum in a bid to promote those sectors in the U.S. Canada has responded with countertariffs on its own that the government says hit more than $80 billion worth of American imports to Canada. Canada's lead trade negotiator with the Trump administration, Ambassador Kirsten Hillman, was not available for an interview this week, the embassy in Washington told the Star. Charest, however, said he believes it is possible that Canada could accept some level of tariffs in a July 21 deal, so long as they have no material effect. Such 'zero-effect' tariffs could only kick in at levels of trade that Canada doesn't or likely won't achieve, for example. Yet there's a question of how much any deal can be relied upon, so long as Trump is in the White House, unilaterally imposing tariffs that Canada views as 'illegal' violations of the 2018 trade deal. 'Trump is arguing about supply management and the (Digital Services Tax), but it's the U.S. that is in flagrant breach of its trade obligations. It's abandoned the CUSMA, virtually behaving as if it did not exist and the U.S. signature has no meaning,' Herman said. 'So we are in a world where rules and the rules-based system, and the stability that that treaty was supposed to provide, have gone by the board.' That means, at least for now, the Carney government is operating in a world where Canada's foremost ally, the colossus to the south, will use economic force to get what it wants.
Yahoo
5 hours ago
- Yahoo
Elon Musk has a one-word response to 'America Party' polls
Elon Musk has a one-word response to 'America Party' polls originally appeared on TheStreet. Elon Musk may now be reaching a political crossroads of his own making. Just a few days before, the Tesla and SpaceX CEO had pledged to launch a new "America Party" party if former President Donald Trump's contentious tax-and-spending bill were to pass. "If this insane spending bill passes, the America Party will be formed the next day," Musk wrote on X. "Our country needs an alternative to the Democrat-Republican uniparty."With the "Big Beautiful Bill" now on its way to Trump's desk for a July 4th signing, political watchers have their eyes on what Musk will do next. The 800-page legislation makes permanent the 2017 tax cuts that were President Trump's signature legislative accomplishment, and it slims funding for several federal programs, while it adds more than $3 trillion to the national January, Trump appointed Elon Musk as senior advisor and de facto director of the newly founded "Department of Government Efficiency" (DOGE), tasking him with reducing bureaucratic waste through an executive order- until his departure in late May. On July 4, Musk reposted a poll showing 40% of voters said they are likely to back a single word from Elon Musk: "Encouraging." An outspoken fan of Bitcoin and Dogecoin, Musk has repeatedly clashed with government regulators over their perceived overreach, most recently with the One Big Beautiful Bill. Meanwhile, President Trump has also dabbled in crypto as a key pillar of his economic policy platform, bringing forth Acts on stablecoins and removing redundant laws in the crypto industry, often referred to as Operation Choke Point 2.0. Crypto bettors are watching it super closely. On crypto betting platform Polymarket, the odds of Musk starting a party by December 31 are now up to 49%, with more than $700,000 in wagers put in. Another crypto betting platform, Kalshi, shows a similar movement, with 41% odds as of July 4, up from under 10% a week before. At press time, BTC is trading at $109,935.55, nearing the 24 hour high of $110,000, as per Kraken. Elon Musk has a one-word response to 'America Party' polls first appeared on TheStreet on Jul 3, 2025 This story was originally reported by TheStreet on Jul 3, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
