Economy gains 73,000 jobs in July; significant corrections in job figures for May and June, according to CEI investigation
The US job market is facing a challenging period, with economic uncertainty surrounding trade policies causing businesses to slow down hiring. According to the latest Labor Department's report, only 73,000 jobs were gained in July, below forecasts. This figure represents a significant drop compared to the previous months, with major downward revisions for May and June job numbers, eliminating 258,000 jobs.
The slowdown in job growth has led to an increase in long-term unemployment. Unfortunately, 1.8 million people are now affected, as job growth is not keeping up with population growth. The unemployment rate has also risen, increasing from 4.1% to 4.2%.
The administration's efforts to trim the federal workforce have resulted in losses of 84,000 jobs so far this year. However, resistance to these downsizing measures has had an ironic effect, boosting the jobs numbers higher than they would otherwise be.
Economists, such as CEI Senior Economist Ryan Young, have expressed concerns about the labor market development. Young stated that the economy has been at full employment for several years. The Ifo Institute's economist, Timo Wollmershäuser, has gone as far as predicting rising unemployment and lowered growth forecasts for Germany in 2026.
The slowdown in job growth can be linked to the administration's trade policy uncertainty. Businesses have held back on hiring and investments due to the uncertainty created by the administration's trade policy. This has led to a decline in the labor force participation rate by half a percentage point this year, with more than half a million people dropping out of the labor force.
Despite the current challenges, it is important to note that the job market is not expected to suffer indefinitely. Until and unless the administration's policies settle, the jobs numbers are expected to continue to suffer accordingly. However, with a stable and predictable economic environment, there is potential for job growth to pick up again.
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