Chase Stevens/Las Vegas Review-Journal/Tribune News Service via Getty Images
David Kelly, the chief global strategist at JPMorgan Asset Management, described the Bureau of Labor Statistics’ new jobs report in one simple word: “ouch.”
There were several pain points: The US added 22,000 jobs, a big miss from the 75,000 expected, and June’s job growth was revised to the first employment decline since December 2020. Unemployment is still low but is now at its highest since October 2021. Several major industries experienced job losses, adding to the tough picture for job seekers.
“The numbers this morning are quite consistent with other things we’ve been seeing on the jobs market, and it suggests that the economy is just running out of momentum,” Kelly said.
It’s probably going to take more work to get a job, as data released earlier this week showed July unemployment outpaced the number of posted job openings for the first time since 2021. The Federal Reserve will likely make its first rate cut of 2025 in less than two weeks, but even that likely won’t bring much relief to consumers just yet.
Below are three things you should know about the economy after today’s report.
Job seekers’ frustrations about a frozen market are even more justified
Job growth has ground to a halt across much of the economy; nine major sectors had month-over-month declines in August compared to the handful that had month-over-month gains. Employment fell in both traditionally white-collar and blue-collar fields.
Private education and health services was one of the few sectors showing a healthy gain, thanks to the growth in both healthcare and social assistance, despite a small dip in private educational services.
Laura Ullrich, the director of economic research in North America at the Indeed Hiring Lab, said job seekers will likely need to be adaptable in the stalling job market. That means either broadening their applications from full-time jobs to part-time work or applying to jobs in a different field than their past experiences.
“Network as much as you can, take a part-time job, volunteer your time in a way that could very much mirror a job on a résumé,” Ullrich said.
Still, it can be harder to find work because the job market is pretty frozen, and the back-and-forth on tariffs is making it harder for some firms to plan staffing decisions. Kelly said businesses don’t want to lay people off, but they are also “too uncertain” to hire.
Manufacturing employment fell for the fourth straight month. Jed Kolko, a senior fellow at the Peterson Institute for International Economics, said the fall in durable goods manufacturing employment, in particular, is worrisome.
“That is the sector where we would expect to see the clearest effects of tariffs,” he said.
Interest rate cuts are coming
Federal Reserve Chair Jerome Powell has repeatedly said that a still-strong labor market is driving the economy, but the last few reports have been dismal.
CME FedWatch showed, based on market moves, a near-certain chance for the long-awaited cut at the Fed’s next meeting on September 17. A jumbo-cut of 50 basis points could depend on what the consumer price index, one inflation measure, looks like next week.
After five consecutive decisions of keeping rates steady, a rate cut could bring some relief to consumers, because the Fed’s rate decision affects mortgages, auto loans, and credit cards.
Mark Hamrick, Bankrate’s senior economic analyst, said a 25-basis-point rate cut, which is more likely at the moment, “would not have hugely consequential implications for the lives of most Americans.”
“The benchmark rate would still be seen as restrictive,” he added. “However, if it is the beginning of a sustained rate reduction campaign, that would be more meaningful, reducing economic headwinds and potentially giving the housing market a boost.”
Despite how the job market looks, the US is still not in a recession
A lot of factors go into an official recession call, and economists who have talked to Business Insider over the past few months don’t think we are in one or that it’s inevitable we enter one soon. There are risks, though, and things to watch out for, like whether unemployment spikes.
It can also be hard to tell how the economy is really doing. Real gross domestic product growth looked healthy in the second quarter on its surface, but its growth was largely due to a fall in imports after businesses previously stocked up due to tariff decisions. Real personal consumption expenditures have had modest growth recently.
Kelly said the past two recessions were dramatic, so they’re not too helpful in assessing today’s job market because it is so different.
“I think that people who’ve lived through the great financial crisis and the pandemic recession don’t recognize a slow slowdown in the economy,” Kelly said. “That’s what we’ve got.”
Are you struggling to find a job, or have you landed a job in a creative way? Reach out to this reporter to share your story at [email protected].
The post 3 big things you need to know about the economy following today’s brutal jobs report appeared first on Business Insider.
