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Yahoo
04-08-2025
- Business
- Yahoo
The labor market just hit a wall. Here's what it means for the economy.
Friday's disappointing July employment report delivered a reality check on the U.S. economy, with the data suggesting the job market is wobbling from the uncertainty of on-again, off-again tariffs. What was surprising about the Friday report was that employers not only hired fewer people than expected last month, but the government revised its jobs data sharply downward for the prior two months. With the revisions, the U.S. added 19,000 jobs in May and 14,000 in June, reflecting "paltry" employment growth during those months, according to a research note from EY-Parthenon Chief Economist Gregory Daco. The latest jobs data is shedding new light on the U.S. economy as businesses absorb a multitude of changes — from President Trump's trade deals and fresh tariffs to the new GOP tax law, which provides tax breaks to many Americans but also cuts spending on health care and social programs like food stamps. The jobs data backs up anecdotal evidence from the Federal Reserve's most recent "beige book" — a report that compiles comments from local businesses — that many companies are delaying hiring "until uncertainty diminished." "Based on what I was hearing from a lot of employers, I kept expecting to see a stagnant jobs report at some point, that's what we got today," Laura Ullrich, Indeed's director of economic research for North America and a former official at the Federal Reserve Bank of Richmond, told CBS MoneyWatch. She added, "We know the economy has ups and downs, and we're in a pretty stagnant place right now." In other words, while the labor market isn't seeing massive layoffs, companies also aren't expanding their hiring plans. That can make it difficult for unemployed workers to find new jobs, with the number of people searching for work for more than 27 weeks jumping 11% to 1.8 million last month compared with a year earlier, government data shows. Pockets of strength To be sure, there were pockets of strength in the jobs report, with health care and social assistance adding a combined 73,300 jobs last month, the BLS reported. But many major U.S. employment sectors saw little or no hiring, including leisure and hospitality, transportation and construction, while others — including manufacturing — saw job losses last month, the July data shows. President Trump on Friday claimed without evidence that the jobs report was manipulated for "political purposes," and fired Bureau of Labor Statistics Commissioner Erika McEntarfer. He also asserted that the downward revisions were "a major mistake," although the BLS revises its data each month to reflect new information, and the numbers frequently move both up and down. "The president's belief that the BLS commissioner personally 'produced' the jobs numbers is preposterous and shows a complete misunderstanding of how government statistical agencies operate," noted Heidi Shierholz, the president of the left-leaning Economic Policy Institute and a former chief economist at the Department of Labor, in a post about McEntarfer's firing. She added, "These data are the product of careful work by hundreds of expert economists, statisticians and civil servants following transparent, well-established methodologies." Tariff uncertainty Businesses have been expressing hesitation given the uncertain impact of the Trump's tariffs, Federal Reserve Bank of Cleveland president Beth Hammack told CBS News' Kelly O'Grady. "I'm hearing that uncertainty has really been weighing on businesses," Hammack said of her discussions with business owners in her district, which spans Eastern Kentucky, Ohio, Western Pennsylvania and part of West Virginia. "They've been having a tough time to decide when to invest, how much to invest. Many of them have scaled back plans for investment." For instance, one franchise owner said that they planned to refurbish their existing locations, rather than open new locations, she added. Mr. Trump has said tariffs would revive U.S. manufacturing because companies will reshore or open new factories domestically, rather than pay the import duties. Some Trump officials portrayed the jobs report as a temporary setback as the administration seeks to revive American jobs through its trade policies. "Obviously there were elements of [the jobs report] that we didn't love, but the trade deals are now in place that cover — including the U.S. — almost 60% of the global economy," Stephen Miran, head of the White House Council of Economic Advisors, told reporters Friday. With the setting of new tariff rates on Thursday for dozens of nations, uncertainty has also been resolved, he added. "There probably were a lot of firms that, you know, sort of sitting there in May and June saying, 'Hey, you know, this tariff stuff's about to be resolved, this bill you know hopefully becomes law within a month or two — maybe I'm just going to hold off on this investment program.'" Also on Friday, White House spokesperson Karoline Leavitt issued a statement describing a flourishing economy under President Trump. "Inflation has cooled, wages have increased, unemployment is stable, and the private sector is growing. President Trump's America First agenda has ensured new jobs go to American citizens, instead of illegals or foreign-born workers. The tariffs are raking in billions of dollars to make our country wealthy again," the statement read in part. A decline in manufacturing jobs The U.S. lost 11,000 manufacturing jobs in July, and the revisions for May and June also show that the sector shed workers during those months. That's notable given Mr. Trump's promise to revive manufacturing jobs, which has led to new agreements from the likes of Johnson & Johnson and Apple to build new plants in the U.S. But the Trump administration's tariffs have added to the challenges facing the manufacturing sector, especially those producing durable goods such as appliances and automobiles, noted Indeed's Ullrich. For instance, tariffs on imported metals such as steel and aluminum are making it pricier for many manufacturers to create their products, putting pressure on their margins and profits. The downturn in manufacturing jobs "is hardly surprising," said Scott Paul, president of the trade group the Alliance for American Manufacturing, in an email. "It's another 'treading water' number, which has been the case more often than not for the past few years. But it is concerning that we're now 173,000 jobs below the most recent peak in February 2023," when total nonfarm payroll employment rose to 155.4 million. It's possible that manufacturing jobs could reverse the trend now that the Trump administration's tariffs and tax policies are settled, Paul added. Progress on the Trump administration's goal of reshoring American manufacturing jobs may take years, given the cost and time required to build new factories, Ullrich noted. "There are certain products that, even with the tariffs, are still cheaper to make overseas," she added. "This is not a healthy job market," said Heather Long, chief economist at Navy Federal Credit Union, in an email. "The economy needs certainty soon on tariffs. The longer this tariff whiplash lasts, the more likely this weak hiring environment turns into layoffs." How safe is our Social Security safety net? Texas House votes to arrest lawmakers who fled state to stop redistricting vote What is "most-favored nation" drug pricing and how does it work? 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CBS News
04-08-2025
- Business
- CBS News
The labor market just hit a wall. Here's what experts say it means for the economy and your job.
Friday's disappointing July employment report delivered a reality check on the U.S. economy, with the data suggesting the job market is wobbling from the uncertainty of on-again, off-again tariffs. What was surprising about the Friday report was that employers not only hired fewer people than expected last month, but the government revised its jobs data sharply downward for the prior two months. With the revisions, the U.S. added 19,000 jobs in May and 14,000 in June, reflecting "paltry" employment growth during those months, according to a research note from EY-Parthenon Chief Economist Gregory Daco. The latest jobs data is shedding new light on the U.S. economy as businesses absorb a multitude of changes — from President Trump's trade deals and fresh tariffs to the new GOP tax law, which provides tax breaks to many Americans but also cuts spending on health care and social programs like food stamps. The jobs data backs up anecdotal evidence from the Federal Reserve's most recent "beige book" — a report that compiles comments from local businesses — that many companies are delaying hiring "until uncertainty diminished." "Based on what I was hearing from a lot of employers, I kept expecting to see a stagnant jobs report at some point, that's what we got today," Laura Ullrich, Indeed's director of economic research for North America and a former official at the Federal Reserve Bank of Richmond, told CBS MoneyWatch. She added, "We know the economy has ups and downs, and we're in a pretty stagnant place right now." In other words, while the labor market isn't seeing massive layoffs, companies also aren't expanding their hiring plans. That can make it difficult for unemployed workers to find new jobs, with the number of people searching for work for more than 27 weeks jumping 11% to 1.8 million last month compared with a year earlier, government data shows. To be sure, there were pockets of strength in the jobs report, with health care and social assistance adding a combined 73,300 jobs last month, the BLS reported. But many major U.S. employment sectors saw little or no hiring, including leisure and hospitality, transportation and construction, while others — including manufacturing — saw job losses last month, the July data shows. President Trump on Friday claimed without evidence that the jobs report was manipulated for "political purposes," and fired Bureau of Labor Statistics Commissioner Erika McEntarfer. He also asserted that the downward revisions were "a major mistake," although the BLS revises its data each month to reflect new information, and the numbers frequently move both up and down. "The president's belief that the BLS commissioner personally 'produced' the jobs numbers is preposterous and shows a complete misunderstanding of how government statistical agencies operate," noted Heidi Shierholz, the president of the left-leaning Economic Policy Institute and a former chief economist at the Department of Labor, in a post about McEntarfer's firing. She added, "These data are the product of careful work by hundreds of expert economists, statisticians and civil servants following transparent, well-established methodologies." Businesses have been expressing hesitation given the uncertain impact of the Trump's tariffs, Federal Reserve Bank of Cleveland president Beth Hammack told CBS News' Kelly O'Grady. "I'm hearing that uncertainty has really been weighing on businesses," Hammack said of her discussions with business owners in her district, which spans Eastern Kentucky, Ohio, Western Pennsylvania and part of West Virginia. "They've been having a tough time to decide when to invest, how much to invest. Many of them have scaled back plans for investment." For instance, one franchise owner said that they planned to refurbish their existing locations, rather than open new locations, she added. Mr. Trump has said tariffs would revive U.S. manufacturing because companies will reshore or open new factories domestically, rather than pay the import duties. Some Trump officials portrayed the jobs report as a temporary setback as the administration seeks to revive American jobs through its trade policies. "Obviously there were elements of [the jobs report] that we didn't love, but the trade deals are now in place that cover — including the U.S. — almost 60% of the global economy," Stephen Miran, head of the White House Council of Economic Advisors, told reporters Friday. With the setting of new tariff rates on Thursday for dozens of nations, uncertainty has also been resolved, he added. "There probably were a lot of firms that, you know, sort of sitting there in May and June saying, 'Hey, you know, this tariff stuff's about to be resolved, this bill you know hopefully becomes law within a month or two — maybe I'm just going to hold off on this investment program.'" Also on Friday, White House spokesperson Karoline Leavitt issued a statement describing a flourishing economy under President Trump. "Inflation has cooled, wages have increased, unemployment is stable, and the private sector is growing. President Trump's America First agenda has ensured new jobs go to American citizens, instead of illegals or foreign-born workers. The tariffs are raking in billions of dollars to make our country wealthy again," the statement read in part. The U.S. lost 11,000 manufacturing jobs in July, and the revisions for May and June also show that the sector shed workers during those months. That's notable given Mr. Trump's promise to revive manufacturing jobs, which has led to new agreements from the likes of Johnson & Johnson and Apple to build new plants in the U.S. But the Trump administration's tariffs have added to the challenges facing the manufacturing sector, especially those producing durable goods such as appliances and automobiles, noted Indeed's Ullrich. For instance, tariffs on imported metals such as steel and aluminum are making it pricier for many manufacturers to create their products, putting pressure on their margins and profits. The downturn in manufacturing jobs "is hardly surprising," said Scott Paul, president of the trade group the Alliance for American Manufacturing, in an email. "It's another 'treading water' number, which has been the case more often than not for the past few years. But it is concerning that we're now 173,000 jobs below the most recent peak in February 2023," when total nonfarm payroll employment rose to 155.4 million. It's possible that manufacturing jobs could reverse the trend now that the Trump administration's tariffs and tax policies are settled, Paul added. Progress on the Trump administration's goal of reshoring American manufacturing jobs may take years, given the cost and time required to build new factories, Ullrich noted. "There are certain products that, even with the tariffs, are still cheaper to make overseas," she added. "This is not a healthy job market," said Heather Long, chief economist at Navy Federal Credit Union, in an email. "The economy needs certainty soon on tariffs. The longer this tariff whiplash lasts, the more likely this weak hiring environment turns into layoffs."
Time of India
01-08-2025
- Business
- Time of India
US hiring slowdown: Economy likely added 115,000 jobs in July trailing last year's pace; grads, young workers hit hardest
AI-generated image The US labour market is showing signs of gradual weakening, with job growth slowing even as widespread layoffs and overall unemployment stays low, according to the Assoicated Press report. Recent graduates are among the worst affected. The jobless rate for Americans aged 22–27 with a university degree rose to 5.8 per cent in March—its highest non-pandemic level since 2012—well above the national average. Meanwhile, workers more broadly appear hesitant to switch jobs, with many believing the current market reflects peak employment opportunities. That perception is gaining weight as hiring momentum wanes across most sectors, marking a sharp reversal from the post-pandemic surge when employers wooed talent with signing bonuses, flexible schedules, and even pet insurance. The latest US Labor Department employment report, due Friday (US time), is expected to show a gain of 115,000 new jobs in July, according to a FactSet survey of analysts. Though not weak, this would trail both June's 147,000 additions and last year's monthly trend. So far in 2024, the economy has added an average of 130,000 jobs per month- down 23 per cent from 2023 and 68 per cent below the 2021–2023 recovery period. Economists say several forces are driving this cooling: the Federal Reserve's high interest rates to curb inflation, President Donald Trump's newly reinstated import tariffs, and fears of declining international labour supply under looming deportation plans. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like He Did THIS at the Wedding—And His Bride Couldn't Hold Back the Tears Read More Undo 'The labour market is poised for a summer slowdown as businesses put hiring plans on hold but refrain from broad-based layoffs,' Gregory Daco, chief economist at EY-Parthenon, wrote this week, quoted by AP. 'We see job growth slowing well below trend in the coming months.' Despite this, job security remains relatively strong. The national unemployment rate stands at 4.1 per cent, while unemployment benefit applications remain in a normal range. But that headline figure masks disparities. 'A low unemployment rate and a muted pace of layoffs mask underlying weakness,' said Adam Schickling, senior economist at Vanguard. 'The health of the job market can be a matter of perspective. If you're a nurse, prospects are excellent—the unemployment rate for experienced health care practitioners is under 2 per cent. But for young people or older workers re-entering the market, opportunities may appear scarce. ' The voluntary resignation rate—a key sign of worker confidence—has also dropped below pre-pandemic levels. Employment growth is now largely confined to a few sectors. Of the 644,000 private-sector jobs added in 2024, around 405,000- over 63 per cent- have come from healthcare and social assistance alone. Young entrants and returning workers are struggling most amid fewer openings and longer job hunts. The number of discouraged workers—those who have stopped looking because they believe no jobs are available- rose by 256,000 in June to 637,000, according to the Labor Department. 'Historically, a drop in hiring has come with a spike in layoffs, a one-two punch that pushes up unemployment,' said Schickling. 'Today's labour market is defying that pattern.' Part of the explanation lies in the shrinking role of manufacturing, where companies once made sweeping headcount cuts. 'There's simply less headcount to cut,' he added. Ultimately, the job market appears to be softening—not collapsing. 'Firms are pulling back on hiring without shedding existing workers in significant numbers,' Schickling noted. 'The result is a gradual slowdown, not a sharp downturn.' Stay informed with the latest business news, updates on bank holidays and public holidays . Discover stories of India's leading eco-innovators at Ecopreneur Honours 2025
Yahoo
01-08-2025
- Business
- Yahoo
Inflation rises, affirming Fed decision to hold benchmark rate steady
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Dive Brief: Inflation picked up in June, the Bureau of Economic Analysis said Thursday, a day after Federal Reserve policymakers decided, in a vote with two dissents, to hold the main interest rate steady rather than risk pushing up prices with a rate cut. The personal consumption expenditures price index rose at an annual 2.6% rate in June compared with 2.4% in May, the bureau said. Core PCE, a measure excluding volatile food and energy prices and preferred by the Fed, increased at a 2.8% annual rate, well above the central bank's long-term inflation goal of 2%. 'The Fed got validation this morning with PCE coming in a little higher than expected,' Scott Helfstein, head of investment strategy at Global X, said in a client note. 'Healthcare, housing and utilities continue to be key sources in driving inflation,' he said. Dive Insight: Tariffs set this year by the Trump administration prompted consumers to limit spending in June, EY-Parthenon Chief Economist Gregory Daco said in a client note. 'There was ample evidence of tariff-induced consumer caution with inflation adjusted spending on goods up only 0.07% and spending on services up a meager 0.05%,' Daco said, citing data released Thursday. Weak consumption highlights the risks to economic growth from the Fed's decision to forgo a reduction in borrowing costs until the inflationary impact of import duties is clear, according to economists. 'The combination of tariff-related cost increases, persistent policy uncertainty, curtailed immigration and elevated interest rates is expected to further weigh on employment, business investment and household consumption,' Daco said. Uncertainty over shifts to trade and other federal policies slowed economic growth to an annual rate of 1.2% during the first six months of 2025, or less than half the pace of last year. Fed Chair Jerome Powell on Wednesday sought to dispel the notion that monetary policy is weighing on growth, an assertion made in the past several weeks by President Donald Trump. Policymakers have held the federal funds rate at a range between 4.25% and 4.5% for five consecutive meetings. 'The economy is not performing as if a restrictive policy is holding it back,' Powell said in a post-meeting press conference. Trump redoubled his criticism of the Fed on Thursday, lashing out at Powell for not reducing borrowing costs. 'Jerome 'Too Late' Powell has done it again!!!' Trump said in a social media post. 'He is TOO LATE, and actually, TOO ANGRY, TOO STUPID, & TOO POLITICAL, to have the job of Fed Chair.' Powell "is costing our Country TRILLIONS OF DOLLARS,' Trump said, reiterating his assertion that a reduction in the federal funds rate would trim interest payments on spiraling federal debt. Trump by the end of 2025 will be able to announce a replacement for Powell, whose term as Fed chair expires in May, Treasury Secretary Scott Bessent said Thursday. 'We are putting together a very good list of candidates,' Bessent said, adding that Powell would break with tradition if he remains on the Fed's policymaking body until his tenure as a governor expires in 2028. It would be 'highly unusual for a chair to stay on,' Bessent said in a CNBC interview. Recommended Reading Services spur growth as coming election jars business confidence: S&P Sign in to access your portfolio
News18
01-08-2025
- Business
- News18
Economy likely created 115,000 jobs in July as labour market loses momentum
Washington, Aug 1 (AP) The American job market is deteriorating — ever so slowly. It's not showing up as widespread layoffs. The unemployment rate is still low. It's subtler than that: New college graduates are struggling to break into the job market. The unemployment rate for college graduates 22 to 27 years old, reached 5.8 per cent in March, the highest, excluding the pandemic, since 2012, and far above the nationwide unemployment rate. Many Americans are staying in their jobs, unwilling to start the job hunt, because they believe this is as good as it gets, and there is growing evidence that they're right: Few industries are actually hiring aggressively. The current situation is a sharp reversal from the hiring boom of just three years ago when desperate employers were handing out signing bonuses and introducing perks such as Fridays off, fertility benefits and even pet insurance to recruit and keep workers. When the Labor Department puts out its July employment report Friday, it's expected to show that companies, government agencies and nonprofits collectively added 115,000 jobs last month, according to a survey of forecasters by the data firm FactSet. That is not a bad number but its worse than last year, and even last month, when employers added 147,000 jobs. So far this year, employers have added an average 130,000 jobs a month, down 23 per cent from last year's hiring and a whopping 68 per cent below the 2021-2023 average when the economy was bounding back from COVID-19 lockdowns. Weighing on the job market are the lingering effects of higher interest rates that were used by the Federal Reserve to fight inflation; President Donald Trump's massive import taxes and the costs and uncertainty they are imposing on businesses; and an anticipated drop in foreign workers as the president's massive deportation plans move forward. 'The labour market is poised for a summer slowdown as businesses put hiring plans on hold but refrain from broad-based layoffs," Gregory Daco, chief economist at EY-Parthenon wrote in a commentary this week. 'We see job growth slowing well below trend in the coming months." Still, most American workers enjoy an unusual level of job security. The unemployment rate is low at 4.1 per cent. The number of Americans applying for unemployment benefits — a proxy for layoffs — remains at healthy levels. But Adam Schickling, senior economist at Vanguard, cautions that 'a low unemployment rate and a muted pace of layoffs mask underlying weakness." In a commentary Tuesday, Schickling wrote that the health of the job market 'can be a matter of individual perspective…If you're a registered nurse, you may believe the job market's health to be excellent. The unemployment rate for experienced health care practitioners is currently below 2 per cent. If you're young and just entering the labour force or you're older and seeking to reenter it, prospects may seem bleak." The rate of people quitting their jobs — a sign they're confident they can land something better — has fallen from the record heights of 2021 and 2022 and is now below where it stood before the pandemic. For one thing, hiring has become concentrated in a handful of industries. So far this year, for example, private US employers have added 644,000 jobs. Of those, nearly 405,000 — or 63 per cent — were in just one of the Labor Department's industry categories: healthcare and social assistance, which spans everything from hospitals to daycare centres. As hiring has cooled over the past couple of years it's become harder for young people or those re-entering the workforce to find jobs, leading to longer job searches or spells of unemployment. The Labor Department said the number of discouraged workers, who believe no jobs are available for them, rose by 256,000 in June to 637,000. 'Historically, a decline in hiring has been accompanied by a swift rise in layoffs, a one-two punch that drives up the unemployment rate," Schickling wrote in a commentary. 'Today's labour market is defying that pattern." One reason is that manufacturing companies, which tend to pull the trigger on layoffs quickly when economic conditions weaken, account for an ever-smaller share of American jobs. 'So there is simply less headcount to cut," he said. The bottom line: 'Firms are pulling back on hiring without shedding existing workers in significant numbers," Schickling said. 'The result is a labour market that is softening gradually, not collapsing." (AP) GRS GRS (This story has not been edited by News18 staff and is published from a syndicated news agency feed - PTI) view comments First Published: August 01, 2025, 13:00 IST News agency-feeds Economy likely created 115,000 jobs in July as labour market loses momentum Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
