The U.S. job market faced a setback in August, adding only 22,000 jobs, while the unemployment rate climbed to 4.3%, according to a report from the Bureau of Labor Statistics (BLS) released on Friday. This report is significant as it is the first since President Donald Trump dismissed BLS Commissioner Erika McEntarfer, who was appointed by President Biden. McEntarfer’s departure followed revisions to previous job reports, which lowered the number of jobs added in May and June by nearly 260,000.
Economists had anticipated a much stronger performance, expecting an increase of around 75,000 jobs for August. The disappointing figures raise concerns about the direction of the job market. Despite the weak job numbers, analysts believe this could prompt the Federal Reserve to consider lowering interest rates at its upcoming meeting. Typically, higher unemployment leads the Fed to cut rates to stimulate growth and encourage hiring.
In a reaction to the report, Trump criticized Federal Reserve Chair Jerome Powell on his Truth Social platform. He expressed frustration that Powell had not acted sooner to lower rates, calling him “Too Late.”
The report highlighted a decline in both the wholesale trade and manufacturing sectors, which lost 12,000 jobs each. In contrast, the health care sector saw the most growth, adding 31,000 positions. Average hourly earnings increased by 0.3%, aligning with expectations, while annual wage growth reached 3.7%, just shy of the anticipated 3.8%.
Daniel Zhao, chief economist at Glassdoor, commented on the report, stating that the labor market is losing its momentum. He noted that the downward revisions to past job figures suggest the economy may be facing challenges ahead.
Trump had previously criticized McEntarfer, alleging that she inflated job growth numbers to influence the election in favor of Kamala Harris. Following her dismissal, he nominated economist E.J. Antoni to lead the BLS. Antoni, affiliated with the Heritage Foundation, shares Trump’s concerns about the accuracy of BLS data and has called for improvements in how job data is collected and reported.
As the economy grapples with these changes, the focus will be on how the Federal Reserve responds and what this means for future job growth and economic stability.
