The Trump job market is nothing to brag about
The June job numbers were middling, and many sectors of the economy are actually losing jobs.
Job growth in June was meh. Employers created 57,000 new jobs. That was less than the average forecast of 113,000 new jobs, but most people don’t care whether the actual number beats expectations, or even know what the forecast is. The job market is still growing, which is good.
But Americans think the job market stinks, and a middling jobs report for June won’t do anything to change their minds.
In the Conference Board’s monthly surveys, for instance, the portion of Americans who think jobs are hard to find is at the highest level since January 2021, when the Covid pandemic was still roiling the economy. The University of Michigan’s sentiment survey is near the lowest levels since it started collecting data in 1952. And President Trump’s approval rating on the economy has collapsed, with the majority of Americans saying the economy is getting worse, not better.
[America 250 isn’t as grim as it seems]
Here’s what the latest employment numbers show. While overall job growth has been positive during Trump’s second term, there’s been a notable slowdown in hiring since the Biden presidency.
Part of that slowdown may be a natural cooling from the stimulus-driven post-Covid boom. But Trump’s policies are probably a factor, too. Higher tariffs on imports raise costs on businesses and add uncertainty, which can depress hiring. And Trump’s aggressive deportations reduce the size of the labor force, which in turn reduces GDP growth and hiring.
Trump’s tariffs are meant to boost the manufacturing sector, because raising the cost of imports, in theory, makes it more cost-effective to build stuff in the United States. But that has done nothing to reverse a long slump in manufacturing employment.
The unemployment rate, at 4.2%, is relatively low. But it’s still higher than during the hiring boom of the Biden years.
It matters where the new jobs are coming from. Most of the new jobs are in health care and social services, where there’s a lot of mandatory spending going toward an aging population. Other sectors dependent on discretionary spending, which better reflect the dynamism of the economy, aren’t doing so well.
The information sector has shed 89,000 jobs during the last year, a sign that tech firms are retrenching and maybe replacing workers with artificial intelligence. Four other major sectors have shed jobs during the last 12 months. Job growth in business services peaked in 2022, with a broad slowdown since then.
[Are you better off than you were one year ago? Only if you own stocks]
Economist David Rosenberg of Rosenberg Research points out that outside of health care, social services, and education, employment declined by 12,000 jobs in June. The number of people in the labor force also declined, which means some unemployed people stopped looking for work. Had labor force participation stayed the same, the unemployment rate would have jumped from to 4.6% instead of falling by a tenth to 4.2%.
Perhaps most worrisome for Trump is an inflation rate that now exceeds wage growth. That means real earnings are negative, the typical paycheck buys less, and the average worker is falling behind.
There’s a silver lining. Modest job and wage growth means the Federal Reserve may not have to raise interest rates to choke off inflation. That gave stocks a modest boost after the job news arrived. Most investors think the Fed will raise rates by around half a point this year. But it may not have to if the end of the Iran war brings energy prices down permanently and there’s no sign of an overheating job market.
[There’s a new type of inflation to worry about]
That would be good for stocks, as lower rates are bullish for corporate profits. But the roaring stock market of the last year has not coincided with a job or earnings boom that benefits most workers. That may be the story for the rest of 2026.
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So everything will be alright if interest rates do not go up by a half point. Now i no that is not what you said but,a caveat must be allowed.The stock market is not the only game in town.I remember when we were burning down our cities because Juneteenth was hardly a holiday.Fountain's in public places were different for white's and black's .What has happened is we have lost our balance.America we have had our problem's but,we are in a WAR right now if you were honest.Thank you should go too our President for that because, he saw a way to get there by starting it with the Democrat's over thing's that should have been left in God's Hand.It is not just a half point. A lot of people are having a hard time paying their bill's and it is the President's fault.Call it what you want but , he has already ripped off a billion dollars and,has three more year's to get a whole lot more.Just saying! God Bless!