“With slowing job growth and wage growth, consumption is almost certain to be weak. Investment is not picking up the gap, so we will likely see further weakness, especially with state and local governments also being forced to make cutbacks,” said Dean Baker, co-founder of the Center for Economic and Policy Research.
WASHINGTON, Aug. 4 (Xinhua) — Last week’s lackluster U.S. unemployment report released by the Bureau of Labor Statistics (BLS) points to a weakening job market, experts said.
According to data released Friday, July saw U.S. job growth slow sharply, with only 73,000 nonfarm jobs added, far below forecasts of 104,000 new roles.
The weaker-than-expected hiring pushed the unemployment rate up to 4.2 percent, from 4.1 percent in June, it said.
Meanwhile, job growth in May and June was revised down by a combined 258,000, the BLS reported, calling the adjustments “larger than normal.”
“Prospects are not great,” Dean Baker, co-founder of the Center for Economic and Policy Research, told Xinhua.
“With slowing job growth and wage growth, consumption is almost certain to be weak. Investment is not picking up the gap, so we will likely see further weakness, especially with state and local governments also being forced to make cutbacks,” Baker said.
Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, told Xinhua, “I expect the job market to continue (to be) weak through the end of the year.”
TARIFFS’ IMPACT
The slowdown came as U.S. President Donald Trump’s administration slapped sweeping tariffs on major U.S. trading partners. Economists have long warned that the duties could strain the broader U.S. economy, with some now projecting a potential recession in the fourth quarter.
Hufbauer said the tariffs “indirectly” impact the job market by driving up consumer prices and dampening household purchases.
Likewise, Baker said Trump’s tariffs “definitely” have an impact on the job market as “they are reducing people’s purchasing power, thereby slowing consumption. And the uncertainty crimps investment.”
Meanwhile, Clay Ramsay, senior research associate at the Center for International and Security Studies at Maryland, told Xinhua that the most important part of the BLS report is the downward revisions. “It’s now clear that where the labor market is concerned, we were all living in a fool’s paradise. Now that more information is in, it’s clear that the labor market went dormant back in May and has stayed that way.”
But at the same time, a weaker jobs market could spur the Fed to lower interest rates. A rate cut would boost economic growth, depending on how much the central bank is willing to slash interest rates.
“I think we will see a resumption of Fed rate cuts as a consequence” of the weak job market, Hufbauer said.
Trump’s strong point has always been the economy. But if Friday’s jobs report was the start of a downward trend, that could bode ill for Trump.
Brookings Institution Senior Fellow Darrell West told Xinhua that the slowdown of job growth is a big problem for Trump. “He promised that with his business background, he would lead the country to a very strong economy. His greatest risk is that there is a possibility the United States will see slowing job growth and rising inflation due to his tariffs.”
“That would be a dreadful combination for him politically,” West said.
POLITICAL IMPLICATION
Meanwhile, Trump on Friday fired the boss of the BLS, just hours after the release of the lackluster jobs report, accusing her of manipulating data for political purposes.
“I was just informed that our Country’s ‘Jobs Numbers’ are being produced by a Biden Appointee, Dr. Erika McEntarfer, the Commissioner of Labor Statistics, who faked the Jobs Numbers before the Election to try and boost Kamala’s chances of Victory,” Trump said in a post on Truth Social, without providing any evidence.
“We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified,” Trump wrote.
“This is a political firing, pure and simple. No justification in terms of performance or skills,” said Hufbauer, also a former Treasury Department official.
“Going forward, it’s likely that the BLS staff will prevent large-scale interference with data collection and presentation. However, Trump’s appointee may be able to color statements in a way favorable to Trump,” Hufbauer added.
Echoing his view, Ramsay said Trump’s move could backfire, as it makes McEntarfer “whom the press will always seek for comment on the job market and practices inside Trump’s Bureau of Labor Statistics.”■
Economic Watch: U.S. jobs report points to weakening job market — experts
