October Jobs Report: gear change or a different speed?

In one of those many moves that shows the US economy can be full of surprises there was a major shift from the September Jobs Report from last month’s weak numbers from 29,000 to 165,000 giving praise, and maybe some wonder, from all quarters when the Labor Dept announced the good news on Friday, especially since most markets had predicted between a low of 59,000 and a high of 60,000.

The customary revisions due to the data collection period, earlier, rather than later, gave “a total of 84,000 jobs added: August was revised upwards by 53,000 to 186,000; and September gains totaled 60,000, up from 29,000,” reported CNN.

The increased labor force participation rate gave the higher numbers, and to perhaps the consternation of some, the increase was largely attributable to AI -- its construction of facilities and trained personnel that can manage the huge systems.

As has been seen before the heavy hitters were healthcare and social assistance as robust as ever with 55,100 jobs and business and professional services topping after several previously reported numbers at 70,000 jobs, mostly in AI employment giving some wariness to total condemnation of the burgeoning industry by those lawmakers and protestors fearing unemployment and a deterioration of water and energy supplies.

Once again we have the AI effect with manufacturing  adding 25,000 workers, transportation and warehousing increasing to 24,500 in anticipation of holiday shoppers, and temporary workers jumping to 18,600, as always a way of employers anticipating and predicting if there is room for more permanent hires further along the hiring stream, all of which bear watching in the fourth quarter.

Stopping to take a look at AI, in an interview with CNBC, was Kevin Hassett, director of the National Economic Council and according to The New York Times it said “the main focus of Mr. Hassett’s interview was the tumult in financial markets around artificial intelligence and data centers, after Tuesday’s election swept into office a group of  lawmakers who may more tightly regulate the industry. Voters also approved a series of new ballot measures putting a halt to data center development in their communities.”

In what may be a real battle with the new lawmakers is not only increased regulation, but construction of data centers that could cast a pall on these 70,000 workers in the future, and, perhaps somewhat nervously, “Mr. Hassett said they “respect the localities that decide that’s what they want to do, but America is a big place,” noting that data centers under development now may not be affected by those ballot initiatives. He said there was “plenty of room” elsewhere for those computing facilities.”

The unemployment rate slipped from 4.2 in September to 4.1 in October generating a level of optimism in many quarters, but a mixed reaction from some economists who prefer to see beyond one report.

If there is a seesaw effect, then that may be due to some of the shifting currents beneath the surface, “Tyler Schipper, associate professor of economics at St. Thomas University in Saint Paul, Minnesota, [who] cautioned that some of those categories have been “noisy” in recent months,” added, to CNN, “Part of my hesitance comes from, if we look at the three-month average of job growth right now, it’s pretty similar to where it was earlier in the year,” he said. “And then it dropped back down pretty dramatically over the summer and the early fall.”

“So, is this the beginning of a trend, or are we going to see what we saw earlier this year, where things pick up and then they drop off a little bit?”

One concerning point from the report was,”The number of people employed part time for economic reasons increased by 339,000 to 4.8 million in October. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs.”

A sobering report from The New York Times was its analysis based on the data points that “Nearly 2 million Americans have been out of work for more than six months, the standard definition of “long-term unemployment.””

Noteworthy is that “The number of long-term unemployed (those jobless for 27 weeks or more), at 2.0 million, changed little over the month. The long-term unemployed accounted for 27.6 percent of all unemployed people,” Labor said.

Others are far more sanguine: “Today’s jobs report is a strong rebuttal to fears that the economy is heading into a meaningful slowdown,” Seema Shah, chief global strategist at Principal Asset Management, wrote Friday.”

“You have to look pretty hard to find something to dislike in there,” Dan North, senior economist at Allianz Trade North America,” to CNBC, “It’s a really, really good report, and all around I think you’d say it’s stronger than expected and the best one in a while, and it kind of fits with what I call the stable but perhaps unexciting labor market.

For Black Americans the unemployment rate “fell four tenths of a point to 6.6 percent, partly reversing a big jump in September. The monthly figures are noisy, and economists cautioned against taking the earlier increase at face value. But even after the October decline, the Black unemployment rate has been creeping higher, and is far above the 3.7 percent rate for white workers,” according to The New York Times, giving pause to many Black professionals, particularly women who lost their jobs during the first months of the Trump administration with its DOGE firings.

“The disappearance of diversity, equity and inclusion positions in big companies has heavily affected Black women; a federal government firing spree that eliminated hundreds of thousands of jobs had a heavy impact on Black workers, who are disproportionately represented on federal payrolls; and the slowdown in white-collar hiring rates has felt particularly acute for some Black businesspeople without elite networks as expansive as those of their white and Asian peers.”

Taking another look under the hood we see this from the report: “Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force changed little at 1.6 million in October. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, also changed little over the month at 448,000.”

This data points to the ongoing “low fire-low hire” that we are seeing over the last several months. Also, the fly in the ointment is wages. While,“average hourly earnings increased 0.4% on the month and 3.1% annually, compared with respective estimates for 0.3% and 2.9%,” it is marred by inflation at 3.7 percent.”

American working families are burdened with inflationary costs from the Iran War and tariffs from the Trump administration, especially affecting states like Michigan and Maine with borders on Canada.

The auto industry in Michigan, principally in Detroit, is integrated with Canadian imports for construction and manufacturing and the fishing industry in Maine is in trade with the northern neighbor of the US, to name but a few, but the salient point are higher prices for US consumers.

The recent midterm elections tipping the scales to the Democrats was a report card on the Republican party, and in particular towards President Trump whose statements before his second turn in office promised lower prices have upset voters who feel a sense of betrayal in this intersection of politics and economic interests.

All eyes are not only on next week’s CPI report but also interest rate action by the Federal Reserve and “Traders increased the probability of another quarter percentage point hike when the Federal Open Market Committee meets Dec. 8-9. Odds rose to 76.8%, according to the CME Group’s FedWatch tool, though the indicator pointed to only one more increase after. The odds of further hikes in 2027 have fallen somewhat in recent days, after the midterm election rout and Thursday’s sell-off in tech stocks,” and that, in and of itself, may show that as the traders predict the Federal Reserve will continue along its path of dealing with inflation, since it is far above its 2 percent standard.

Affordable housing as most Americans know is a challenge and especially for home buyers and as Zillow noted, “Stable employment and wage growth give households the confidence to buy a home or sign a new lease, but the housing market is already feeling the chilling effects of the recent surge in mortgage rates.” 

“With mortgage rates above 7%, affordability headwinds in the housing market may still feel insurmountable — even for those who have a job or recently found one. This is consistent with our expectation for a more substantial decline in existing home sales and slower growth in home value in Q4,” they added.

Facing both political and economic challenges the American economy is at the crossroads, and the future is far from certain.

August Jobs Report: Optimism, or a mixed bag?

For those old enough to remember the 1960s sitcom, “The Andy Griffiths Show,” there was the unforgettable character of Marine Sergeant Gomer Pyle, who when surprised, or startled, would yell out "Well, gollee!"; and that was the reaction from many economists, lawmakers, and pundits after Friday’s Labor Department released the August job figures that showed 162,000 non farm jobs; a figure that surprised almost everyone with an anticipated 56,000, or at most 62,000; and, while this was welcomed in many quarters, a closer look reveals much, but it’s important to remember that one report is just a snapshot in time, not a predictor of future outcomes.

Nevertheless there are some notable developments, a rise in manufacturing, mostly attributable to non-residential construction of data centers, and local education, a seasonal bump from the beginning of the school year with teachers and other personnel returning to work after the summer break; but, joined with a slight increase among leisure and hospitality, and stable numbers for health care workers, it does show that the American jobs outlook is stable - perhaps too stable for Federal Reserve rate cuts.. 

“Those sectors added 59,000 and 42,000 jobs, respectively. Payroll gains in August were more than five times the monthly average for the last 12 months, which is 31,000, according to the Labor Department,” reported CBS News

It’s all about wages

But the caveat is that wages are now at 3.4 percent, far less than the rate of inflation of 4.2 percent, forcing many families to struggle with the cost of housing, food and gasoline, now averaging, due to the war on Iran at $4.16 a gallon/

"Slowing nominal wage growth suggests workers don't have the leverage to bid up their wages," Elise Gould, a senior economist at the Economic Policy Institute, a nonpartisan think tank, said in an email. "Even with low unemployment, the depressed hires rate means workers aren't finding new jobs to raise their wages."

“An upside surprise in payrolls will likely ramp up concerns about a rate hike, but that outcome is in the hands of next week’s inflation numbers,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, to CNBC, and  “If those come in cooler than expected, the Fed will likely feel comfortable discounting potentially inflationary signals coming out of the labor market.”

Taking it in hand

Revisions to the monthly reports are expected, considering the collection period, from Labor, and there was the good news of an upward revision for June and July to the tune of 55,000. Taking that into account employers added 21,000 jobs in July.

These numbers “may corroborate that recent softness was temporary rather than indicative of a broader deterioration,” Jerry Tempelman, vice president of economic and fixed income research at Mutual of America Capital Management, said in a statement reported by The Hill.

“Net, net, the labor market is alive and well and generating thousands of new jobs to help keep economic growth squarely in the plus column,” said Chris Rupkey, chief economist at Fwdbonds,” according to CNBC reports.

Or does it? All of these reactions give a certain amount of not merely caution, but uncertainty among those on Wall Street, as well as Main Street, as to what the future means for the American economy. We are not in solid enough territory to make these claims, say critics.

Examining earlier reports, the dial has not moved much over the last several months and we are still harnessed to a “low hire-low fire” jobs based employment atmosphere, but also, in general, to the “K shaped” economy, with those at the top of the economic bar spending freely, while those at the bottom are treading water; and, especially with those populations facing cuts in Medicare and Medicaid, not to mention the cuts in the Supplemental Nutrition Assistance Program, that includes not only adults but their children, showing the road ahead is less travelled.

All politics are local

We can’t omit the intersection of politics into the nation’s economy, and we have this: “With two months to US midterm elections, consumers are likely to take grim notice this [Labor Day] weekend of historic pain at the pump,” averaging $4.19 across the country, according to Bloomberg reporting, “and well above the $3.80 per gallon drivers paid on July 4, the usual peak of summer driving season. Meanwhile, diesel prices rose to a record high of $5.85 a gallon; ”the latter affects the delivery of food across the county creating a singular point because for previous Septembers they have never risen that high.

Going even further, “President Donald Trump, who has publicly dismissed consumer concerns about high energy prices amid already elevated inflation, recently began to change his tune, saying gas prices are “important.”

Neale Mahoney, a professor of economics at Stanford University who worked on fuel policy in the Biden administration, appeared to agree: “The fact that we’re heading into the home stretch of election season with gas prices at historically very high levels, with no obvious signs of relief, should be very concerning to incumbent politicians.”

A look in the rearview mirror from The Hill, shows that, “Economists have pointed to lower net migration rates as a cause of stagnant labor data, as the Trump administration has carried out a widespread deportation campaign. The labor force participation rate has also declined by 0.5 percentage points from January, although it ticked up to 61.6 percent in August, the BLS reported Friday, strong numbers for this month’s Federal Reserve meeting.”

“August’s solid job growth is even more notable since the government cancelled Temporary Protected Status for Haitian refugees on July 27, forcing workers who used that status to qualify for authorization to leave the work force,” Bill Adams, chief U.S. economist for Fifth Third Commercial Bank, said in his press statement.

The question remains is how long can that growth last without these workers? Taking into account that in In July ICE arrears topped a record of 50,000 in July. And, If that trend continues the abatement of workers, albeit low income, will have a deleterious effect on the workforce.

“Graeme Blair, co-director of the Deportation Data Project says the uptick is due to [Mark Wayne] Mullin's change in tactics” and, "What we're seeing is an expansion in all of the different ways that ICE is detaining people," Blair told NPR. "They're arresting people at airports, at ICE check-ins, at immigration courthouses and this is the result of that."

AI, love it, or lose it?

Another area of close examination is the rise of AI data centers and the widespread criticism from environmentalists, and local communities concerned about the drain on water and energy sources. But, it’s the seeming drain on employment that is getting an equal share of attention as more and more entry level positions are now being handled by AI. 

In the not too distant past entry level workers were told to learn how to code, but that is now being generated by AI and employers are eager to harness this cheaper and more reliable source of labor. Annenberg Public Policy Center in Mid August found that 61 percent of Americans are opposed to their construction,

In June there was a Reuters/Ipsos poll that noted “Half of Americans fear that the ​rise of AI could put them or someone in their household out of work, according to a new Reuters/Ipsos poll ‌ that also showed widespread angst at how widely the technology is being adopted.”

Using data gathered over six days, it “found that 53% of Americans shared that worry, which was spread fairly evenly across respondents by age, gender and education level. Some 37% of respondents said they did not worry about this at all with the remaining 10% either unsure ​or opting not to answer the question.”

One important caveat: “Skepticism over AI runs higher among Democrats, whose party attracts more college graduates, than among Republicans, ​who have attracted more working-class voters since President Donald Trump's rise. Some 61% of Democrats said they worried about AI coming for jobs in ​their household, compared to 47% of Republicans.”

In a discussion of the effect of AI on American jobs, it was noted  by marketplace.org that AI does not automatically mean a job loss, or that it is a zero sum game.

“AI, as a technology itself, is different from technologies in the past,” said Nigel Melville, an associate professor at the University of Michigan who studies the socio-technical implications of AI. He said agentic AI’s capacity to mimic human behavior does separate it from previous technologies, but it’s hard to know how that will impact the labor market.”

Taking a step back, or perhaps forward, what remains is consumer confidence and The University of Michigan Survey of Consumers for August found that 51.7 pf Americans felt confidence in the economy. 

Surveys of Consumers Director Joanne Hsu wrote, in part, that, “Consumer sentiment confirmed its early month reading, falling about 6% from last month and landing about 11% below a year ago amid continued worries that inflation will remain elevated for the foreseeable future. Sentiment declines in August were seen for all political groups and were particularly acute among Republicans. Moreover, groups who are typically less-equipped to absorb increases in cost of living also exhibited stronger decreases in sentiment, including older consumers, lower- and middle-income consumers, and those with no stock holdings”.

In an August poll from the Economist/You,Gov found that 23 percent of US citizens feel that the economy is weak.

Oh, Canada

Furthermore, “Any re-escalation of trade tensions will likely exacerbate these trends." which brings us to the trade war with Canada, what the Wall Street Journal called, “the dumbest trade war in history,” and which has baffled economists, and as we noted last month, will cost American consumers dearly, especially in border states such as Michigan and Maine, both swing states in the upcoming November midterm elections, and critical for a victory by Trump.

As has been reported widely this came on the heels of early moves by the president during his first quarter of his second administration; and, while there was a pull back, of sorts, this resurgence seems to have no clear agenda, 

Let’s recall that  in June there was a fresh round of taxes on Canada: three new tariffs for 554 Canadians, “citing Section 338 of the Tariff Act of 1930 for the first time” and covering . .  alcohol, dairy and related goods, wood, electronics, furniture and plastics, hockey equipment, among other goods, including clothing, games, and art, all set to begin August 19 unless reduced, or modified through pending negotiations between the two countries.

At that time American households data research showed they could in effect face a $920 tax rate per household;and, for the bottom quintile the tax rate will rise by 0.8 percent points, and 0.6 percent for the top quintile according to TPC estimates.

The Peterson Institute reported in July that, “Cast aside by the new tariffs is the US promise and legal obligation of zero tariffs made in 2020 when Trump signed the United States-Mexico-Canada Agreement. Prices for the goods affected by these new tariffs, and others in train, could start rising in the runup to the November 2026 midterm election.  Many of the affected goods are currently subject to zero or very low tariffs, under the USMCA, other trade pacts, and the US tariff schedule bound in the World Trade Organization.”

Currently negotiations between the two long term allies is at a stalemate, and Canadian Prime Minister Mark Carney has said,"The attitude of ​the United ⁠States... has been one that the core Canadian industries either would be subsidiaries, effectively, of the United States industries, or (Washington) would put in ⁠place terms ​where those industries would be gradually wound ​down in Canada and wiped out," he said emphasizing that "Of course, we're not going to accept ​those terms."

What will Kevin do?

All eyes are now on the Federal Reserve and whether it will hold interest rates steady, increase, or cut them as the president wants. Kevin Warsh, who succeeded Jerome Powell as Fed Chair, has stressed that he feels the central bank should be independent from the executive branch, but some observers are not so sure.

“Warsh himself has said the president has had no impact on his decisions and, in July congressional testimony, cited the Fed holding rates steady and not cutting as evidence of the central bank’s independence. At the same time, Warsh has said that the president and other politicians have a right to comment on Fed policy,” according to a CNBC report.

What is paramount is how the Fed can meet its twin mandate of full employment and keep inflation below 2 percent, a goal that we have seen is becoming increasingly challenging.

Current rates are between 3.50 to 3.76 and most predictions are for a hike, contravening Trump’s wish and has threatened to cut off trade with several countries unless there are rate cuts, and has said:

“Lower the interest rates because the U.S.A. is a much stronger credit than it was just a short time ago!” he wrote in a post on Truth Social. “A STRONG COUNTRY MEANS A LOWER INTEREST RATE – IT’S A BETTER CREDIT.”

“Without the United States agreeing to allow them their big surpluses, and we could stop that immediately, they would no longer be considered financially ELITE!” he added. “LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT.”

“Traders are now pricing in a 60 percent chance that the Fed hikes rates by a quarter point at its next meeting this month, according to CME FedWatch, which tracks bets placed on future central bank decisions,” reported The Hill, and in what appears to be a threat the president added, “The Fed Board, with its great new leader, must get smart – BE PATRIOTS for a change,” and “High interest rates put the U.S.A. at a very unfair disadvantage, and I won’t allow that to happen!”

The next release of the Consumer Price Index will be on Sept. 11 and the Federal Open Markets Committee meets on Sept. 15-16. Till then it's all conjecture.

Boom or bust for May Jobs report?

There was an old chewing gum commercial in the 1960s with the jingle of “double your pleasure double your fun.” and that seems to apply to the May jobs report released on Friday by the US Labor Department showing a gain of 172,000 non-farm jobs, a figure that was nearly double what economists had predicted, and giving once more, the label of resilience of American labor.

One aspect that gave a welcome tweak to the good news was that there was a broad inroad to jobs beyond health care that extended to both manufacturing and local government employment. But, while this was welcome news, another aspect was that people were staying on the unemployment line longer, and while new jobless claims had not statistically increased, those sitting on the bench have been a cause of concern for the future.

“The share of unemployed workers who have been out of work for 27 weeks or more rose to 27.5% in May, up from 20.4% a year ago and well-above pre-pandemic norms. The situation for many unemployed job seekers is grim, even in the midst of impressive monthly job gains,” said the Hiring Lab in its assessment of the May report.

It’s still a low fire, low hire environment, but with one fell swoop of the cards from further inflation, now at 3.8 percent, the scales could easily tip into recession; and, coupled with the uncertain outcome of the US-Israel war against Iran the effects on the national economy, and jobs could prove precarious.

Turning again to the Hiring Lab they offered this cautionary note:

“This kind of equilibrium can’t hold indefinitely. A market frozen between low hiring and low firing is only stable as long as nothing pushes on it. Should demand soften, the lack of hiring leaves no cushion to reabsorb workers who lose their jobs, and what now reads as a quiet labor market could tip into a rising unemployment rate quickly. The low-hire, low-fire dynamic has been remarkably durable, but durability isn’t permanence. The longer it persists, the more it’s worth watching for the first sign of which direction it finally breaks.”

When the Federal Open Markets Committee meets later this month it will be the first test of the new Federal Reserve Chair, Kevin Warsh to see if he bends to the will of President Trump who wants rate cuts, or will he according to the standards of macro economics increase rates in light of these job numbers, especially considering the revisions to the April report. 

“If Chair Warsh pushes for cuts at his first meeting, he will be pushing against the evidence,” said Seema Shah, chief global strategist at Principal Asset Management.

We still are seeing a mixed bag in the report not only with these concerns but also with wages that have seen a rise but much of that increase will be spent by working families on the increasing higher costs of housing, groceries, and of course, gasoline which has, on the average, since the beginning of the war in February increased to $1.25 per gallon.

Economists are worried about “the 55% rise in the price of diesel fuel, which is used in shipping, farming, transportation and construction. It can quickly raise costs for consumers as the higher price is passed down across a number of industries.”

The cost of diesel fuel which as the New York Times reported in late March, is less discernible to the average consumer but whose price has climbed faster than the price of gasoline with the war, which could lead “to inflation across a wide range of goods” affecting the price and shipping of those products that most Americans rely on.

“Diesel powers a lot of basic industries,” said Vidya Mani, a visiting associate professor at Cornell University’s business school whose research focuses on supply chains. “Mining industries, chemical factories, clothing factories — a lot of those things come from diesel.”

“Because of its far-reaching consequences, it can stop a lot of industries,” she said, adding that if prices continue to rise, consumers will probably begin to see the effects on everyday items and necessities within the next several weeks.”

“Much of the diesel in the United States comes from domestic supplies. But oil companies can still price the commodity at global market rates. In January, a little more than 40 percent of the cost of diesel came from the price of crude oil, according to the Energy Information Administration” making things even murkier for consumers as time goes by without an end to the conflict.

Meanwhile, the unemployment rate remains at 4,3 percent, but, as we've stated before, this is only a snapshot in time, and other factors must be taken into consideration: as NBC News reported, “Average hourly earnings rose 3.4% from a year ago. According to Jennifer Timmerman, an analyst at the Wells Fargo Investment Institute, that’s the lowest since 2021. In April, inflation sharply jumped to a 3.8%, its highest level in three years, due to the surging price of gasoline and the resulting economic ripple effect.”

Another worrisome statistic is that “Wholesale inflation — what businesses pay other businesses for goods and services — surged to 6% in April, according to BLS data released May 13. That was sharply higher than the 4.3% in March,” they added.

In a later report, at the middle of June, BLS reported that the Consumer Price Index rose 0.5 in May, putting the annual inflation rate at 4.2 percent over the last twelve months with energy prices over 7 percent  with the jump in  gasoline paces. The Core CPI, which excludes the volatile food and energy prices rose to  0,2 percent, and on an annual basis to 2.9 percent, creating further economic dilemma to American working families.

Wage growth slowed to 3.5 percent in May compared to April which showed 3.6 percent and that is a figure worth watching. And it’s common knowledge that a dollar doesn't buy what it used to factor in the Trump tariffs and the price of beef, especially ground beef, a staple of the American diet, shows increased prices, just in time for backyard barbecues, a warm weather staple for entertaining. Add to that the morning dose of java, those coffee tariffs are not helping with the daily grind.

For those that follow the market, “After the report, U.S. government bond yields surged and stocks sold off. Fed rate futures also quickly indicated that traders are now projecting a more than 60% chance of a rate hike in October and a more than 98% chance by December’s Fed meeting.”

Waiting may not be an option, said Beth Hammack, president of the Federal Reserve Bank of Cleveland, said on Tuesday, preceding Friday’s report,”“If we wait for definitive evidence that high inflation has become embedded in the economy, it may require larger policy adjustments, at greater cost."

The White House was overjoyed with the report, especially considering the sinking polls for Trump and his handling of the economy, and “I think that basically what we’re seeing is an enormous amount of positive momentum in hiring,” Kevin Hassett, the director of the National Economic Council, said on CNBC Friday morning.

Asked about wage growth tracking below inflation, Hassett deflected concerns on Bloomberg Television, saying that “real wages are going up on average about $3,000 since President Trump took office.”

Once again, driving labor gains over the last year was education and healthcare some of the largest contributors to job growth in May but there were surprises as well, with an unexpected gain of 70,000 jobs in leisure and hospitality, “well above the average monthly gain of 14,000 over the prior 12 months,” BLS said.

NBC reported that PNC Bank chief economist Gus Faucher noted that “the breadth of job growth has picked up in 2026.” He added that “in 2025 there were net job losses in all industries outside of healthcare, but in 2026 those industries are seeing net job growth.”

Local governments also saw job gains but in the last several months there has been a total loss of 350,000 federal jobs and many former workers are gravitating to take their experience to local governments.

One possible theory, and it’s purely speculative, is from The New York Times noted is that “construction, which has been trending up since last fall amid a massive buildup in data centers to serve the A.I. boom. Adam Schickling, an economist with Vanguard, thinks the unseasonably warm spring may have also played a role jump-starting hiring in fields dependent on weather changes.” and he added, “That is essentially something you ultimately pay back in one form or another. You’re hiring people earlier, so then you’re not hiring that person later,” he said. “I think it’s still really early to suggest that there’s a reacceleration in the labor market.”

Slowing to a crawl are financial services, including information technology to 22,000 jobs, “and the transportation/warehousing industry. That sector is “down by 92,000 [jobs] since reaching a peak in February 2025,” the agency said.”

One particular aspect that represents another cautionary note is that, as Axios reported,  “The economy has averaged gains of 114,000 jobs per month so far this year, a far cry from the 10,000 monthly average added in 2025.”

May did give some blockbusting numbers, but it’s a party that might have an end in a few months. With inflation, both consumer and wholesale, against a background of uncertainty with the US and Israel war, and as a result, with climbing fuel costs, and a host of other related factors, plus  lowered wages, the American economy gets, in our estimate, a B minus.

On Monday June 15 the Trump administration announced a memorandum of understanding with Iran towards a cease fire of 60 days and an end of week opening of the Strait of Hormuz, but international observers and economists are leery of the announcement, noting that Israel has not agreed to the deal, and that even if the Strait does reopen it will take months for price regulation to presume pre war price controls due to severe disruption of the international supply chain.

Updated 16 June 2026

April Jobs Report: Resilient for now

In one of those economic surprises, or the ever circuitous path that the American economy has taken in recent years, on Friday the US Dept of Labor released its monthly job data for April revealing 115,000 non-farm jobs, much to the surprise of economists who expected at least half of that figure showing that the American jobs picture is still resilient. And, if that seems to be a hackneyed label, then so be it say a range of not only economists, but academics, market watchers, and others.

CNBC in its coverage said, “The report shows the labor market has been “pretty much stable for a year, year and a half,” Austan Goolsbee, president of the Federal Reserve of Chicago, said in a CNBC interview. “I characterize that we’ve been stable without being good. ... The unemployment rate has been stable, the hiring rate’s been stable, the layoff rate’s been stable, the vacancy rate has been stable. So, I still think there’s not a lot of evidence that the job market is falling apart.”

While it cheered the White House and other administration officials, to others it still seemed to be a cautious praise at best, with higher than sough inflation, and the effects that the War on Iran, and the closing of the Strait of Hormuz which has hampered the delivery of 20 percent of the world’s oil and natural gas resulting in an average per gallon price of gasoline at $4.59 per gallon in the United States.

During his State of the Union address, President Trump declared that America under his leadership was “bigger, better, richer, and stronger” and created a “booming economy” now words that he may regret saying, especially with his polls tanking, those efforts will undoubtedly be on the way. 

The Associated Press-NORC-Center for Public Affairs recently reported that his support in the GOP fell from 74 percent to 62 percent in April, a stark figure among his base of support. Adding to that, 61 percent of Americans do not support the US in its war against Iran. A devolution in his handling of the economy is not far behind, especially with 80 percent of Americans feeling the price squeeze at the gas pump.

While wages increased to 3.6 percent, Americans are now forced to spend much of that increase on gasoline, especially those people who live in areas where public transportation is scarce; and, add to that the spectre of even higher food costs due to increased transportation costs, then the results for many Americans  may be burdensome, especially lower income individuals and families as they struggle to meet higher housing costs in a country that has not created enough of them.

Of equal concern is that job increases may not meet population growth as we reported in April, and where some demographers have said the nation has fallen behind, 

While the unemployment rate is 4.3 percent it could have been higher had not some people simply given up looking for work in a challenging environment, especially for those without college degrees.

A conundrum is that consumers are still spending, and while they are the economic drivers of the national economy the reasons for their continuance bear examining; or,one case, higher than average tax returns are one cause, interest rate cuts by the Fed last year are another, and, lastly, is that high income earners are still spending, it supports the often quoted K shaped economy. But economists say that might not last forever, and if consumers continue to cut back on spending to afford fuel, the consequences, according to Investopedia, would cause “a ripple effect  that hurts the job market. Some forecasters unemployment to rise as soon as this summer.”

Overall, this is an economy that has its visible markers, as well as its less visible ones, notably that job creation has consistently been higher in the small business community, commonly referred by some as the “Mom and Pop” market, where recent analysis has shown that  for companies with less than 20 employees they have created more than 525,000 jobs in 2025; and in January through March 169,000 jobs, a figure greater than by larger employers.

The recent back and forth on a resolution to end the conflict in Iran has caused the markets to go from high to low, often in less than 24 hours; a figure that some observers are attributing to President Trump’s vacillating remarks that the war is over, and there is another resolution pending, but then, also saying that there is no Iranian leadership to negotiate with; all of which has made the market indices seasick trying to keep up.

One prominent feature of the last several months of job reports is the dominance of health care related jobs, attributable to the aging of America, and the needs of the so called “baby boomers” whose longevity requires consistent care. As has been noted, economic observers are wondering of the precariousness of the jobs outlook where one industry dominates all the others. For April this dominance resulted in a gain of 37,000 jobs.

Likewise social assistance of 17,000 jobs gained and attendant home health care of 11,000. Common knowledge dictates this as a historical legacy but its dominance could cut into future gains, or losses for other industries.

On the down side is the continuing loss of federal workers, begun last year at the beginning of the second Trump administration, now with 9,000 additional jobs cut.

On the corporate side, cuts have been rampant lately with those at META, and now the bankrupt Spirit Airlines.

The news that Meta plans to cut approximately 10% of its workforce—roughly 8,000 employees—starting May 20, 2026, “alongside 6,000 open role closures to fund massive AI investments” according to the New York Times CEO Mark Zuckerberg, who deemed 2026 "the year that AI starts to dramatically change the way that we work," expects to offset high infrastructure investment costs while driving efficiencies.

“Mark Zuckerberg, Meta’s chief executive, has said he expects much of the work done in the technology industry to eventually be overtaken by A.I.-powered systems, including coding assistants that help engineers write software.”

“We’re doing this as part of our continued effort to run the company more efficiently and to allow us to offset the other investments we’re making,” Janelle Gale, Meta’s chief people officer, said in the memo to employees. “This is not an easy trade-off and it will mean letting go of people who have made meaningful contributions to Meta during their time here.”

Tech and other informational services have been on the downswing for some time and the April report shows this is a continuing trend with a loss of 13,000, and telecommunications another 3,000.

While the effects of the two months of war with Iran has only slightly affected the US, despite the higher gas prices, the resulting effect on the global economy has been harsh: “The fallout from two months of war in Iran is shuttering textile mills in India and Bangladesh, grounding airplanes in Ireland, Poland and Germany, and prompting energy rationing in Vietnam, South Korea and Thailand. The only country, it seems, that has been relatively spared from the economic chaos is the one that started the war: the United States,” also reported by The New York Times.

“While warning signs of a recession are flashing across countries in Asia and Europe, the United States is likely to outperform most of the world’s advanced economies. Growth is steady and unemployment low. “It’s still hard to bet against the U.S. economy,” the Royal Bank of Canada said last week.”

If the aggression lasts much longer then the effect on US jobs market will increase, despite the repeal of most of the Trump tariffs from the recent decision from the US Supreme Court; but, with recent threats on Spain for not supporting the administration's efforts to open the Strait, an area freight with danger, tariffs will once more be a factor facing American companies, and in turn consumers.

“Economists say it would take a much more significant spike in oil prices, perhaps as high as $150 a barrel, for them to begin worrying seriously about the possibility of a recession in the United States.

That is not the case elsewhere, where the dreaded combination of slower growth and higher inflation is already raising alarms about stagflation.”

Are we safe? Maybe, say some, again from the Times: “For the United States, the biggest advantage is that, unlike most of its global peers, it produces more oil and gas than it consumes. That doesn’t mean it is unaffected by what happens in global energy markets, but it helps dampen the impact.”

Most importantly, “The U.S. economy is also heavily based on services and depends relatively little on the energy-intensive manufacturing industries that have been hit hardest by the spike in oil prices. And it went into the war with a stronger economy than many other countries, giving it more of a buffer against a slowdown.

“We’re not feeling the same pain the rest of the world is,” said Jason Bordoff, the founding director of the Center on Global Energy Policy at Columbia University.

Others are not so sanguine citing the cost of diesel fuel which as the Times also noted, in late March, is less discernible to the average consumer but whose price has climbed faster than the price of gasoline which could lead “to inflation across a wide range of goods” affecting the price and shipping of those products that most Americans rely on.

“Diesel “powers a lot of basic industries,” said Vidya Mani, a visiting associate professor at Cornell University’s business school whose research focuses on supply chains. “Mining industries, chemical factories, clothing factories — a lot of those things come from diesel.”

“Because of its far-reaching consequences, it can stop a lot of industries,” she said, adding that if prices continue to rise, consumers will probably begin to see the effects on everyday items and necessities within the next several weeks.”

“Much of the diesel in the United States comes from domestic supplies. But oil companies can still price the commodity at global market rates. In January, a little more than 40 percent of the cost of diesel came from the price of crude oil, according to the Energy Information Administration” making things even murkier for consumers as time goes by without an end to the conflict.

Spirit Airlines shut down last  Saturday “after failing to strike a deal for a financial lifeline from the Trump administration, two people familiar with the matter said,” according to The New York Times.

For air travelers, looking for a no frills trip with low ticket costs, they had it but also faced charges for nearly everything to balance the fares, they succumbed to “high fuel prices, competition from larger airlines, the Covid-19 pandemic and an engine defect hobbled the company.

In recent weeks, “the airline had been negotiating a $500 million lifeline from the Trump administration. Some of the investors that Spirit owed money to oppose the terms of the bailout, under which the government could have ended up owning 90 percent of Spirit, because it would have left them in a worse financial position if the airline eventually failed.”

4,000 employees in Florida alone are now without jobs, with almost 1,000 employees laid off from Dallas-Fort Worth and Houston airports, plus more in Detroit, with rough estimates of a total of 17,000 ending an era, but also a model that was not working in post pandemic America. 

“Spirit has been widely credited with democratizing air travel in the United States by keeping costs and ticket prices very low. The approach served Spirit well for years, generating huge profits. But competition from larger airlines and rising costs, particularly for pilots and other professionals, hobbled the company after the pandemic. It also suffered disproportionately from industry wide engine problems,” noted the Times.

Meanwhile that old bugaboo, inflation - is still a large concern as has been widely noted, and the Federal Reserve Bank has kept interest rates the same in light of the 3.8 inflation rate, much higher than its 2 percent target, 

While Jerome Powell’s term as head, ends in a few days, the nominee by the president, Kevin Warsh is expected to have Senate approval, and is expected to cut interest rates, since while “the Fed cut rates last year, it did not deliver the kind of relief that Mr. Trump wanted. Since January, it has also turned cautious on subsequent reductions, a sentiment that has only grown amid the war in Iran, which has caused an acute energy shock,” said the Times.

It’s no secret that Trump wants stronger cuts and is determined to influence the Fed from the White House, threatening its traditional independence hinged by mandates on low inflation and job stability, which was threatened by the false charges of cost overruns attributed to Powell at the headquarters building.

Warsh has said if approved there is the chance that he would do so, besides his statement that he would not be the president’s “sock puppet”. Critics and Capitol Hill observers worry that should be stray from the president’s wishes this could be a repeat scenario “according to Peter Conti-Brown, an expert on Fed governance at the University of Pennsylvania, said Mr. Powell’s insistence on a clear, certain end to the investigation was about “not just about protecting himself but about protecting the Federal Reserve.”

“If this becomes a tried-and-true path to bully a central banker out of office, then we will see its invocation again,” said Mr. Conti-Brown, who added that the investigation had already proved damaging in other ways.”

March Jobs Report: Optimism or despair?

Now that the Passover and Easter holidays are over, it’s time to take a closer look at the March jobs report and its surprising report from the US Dept of labor that showed 178,000 non-farm jobs, a figure that far exceeded expectations, and predictions marry that to the previous month’s heavy hitters of health care, as well as a decrease in the unemployment rate to 4.3 percent, it seems that there might have been a rebound from earlier worrisome reports, yet a closer look under the hood shows a different view.

One of the chief concerns is the lowered rate of job participation, and while the BLS deems it negligible,  - 61.9 % - but economists are watching the figure and see that the downward trend is concerning, the less people working, or giving up looking the less the match to population growth and the formula that economists examine to determine the health of the US economy.

“The unemployment rate dropped, but for the wrong reasons: a loss in labor force participation,” Diane Swonk, chief economist at KPMG told Fortune. The declines were concentrated among prime working-age men (twenties to thirties); young women between ages 20 and 24; and men over 55. In other words, the unemployment rate fell not because people found work, but because they became discouraged and stopped looking.”

Add to that the deportation of undocumented workers by the Trump administration and the uncertainty regarding judicial oversight, things don’t seem as rosy as they seem, But, a single report does not hold significance for macro economists, since there is the rule of three reports to accurately predict future concerns.

And, as is BLS custom, all reports are subject to revision as we saw with February that gave a few concerns with its decrease of 133,000, among economists, as well as lawmakers.

One surprise was that construction added 26,000 people to their payrolls and while much of this gain was due to project specific contracts, it is still far less than it has been in the past.

Much of this increase has been attributed to the policies of President Trump, and campaign promises, but this is unclear as of this date.

Federal employment has continued its downward spiral after the DOGE decimation of last year, now down to 355,000 or 11.8 percent, yet there are unverified reports that there are efforts to increase hiring.

Taken together with the threats of AI in the workforce, especially for some programmers, that is a matter of controversy with wildly fluctuating reports varying from total elimination of some jobs, entry-level and white-collar, to the retraining of others.

Forbes noted that, “The pressing question is, ‘You’re going to have a technological shock — how painful is it going to be?” Martha Gimbel, the executive director of the Budget Lab at Yale University, told the [New York] Times."

“At this point, no one knows. Maybe it will be far less than some of the high estimates thrown about. What investors, workers, and the country at large have to realize is there is a risk of unknown size that could further undermine the labor market, also known as the ability of people to make money and live.”

There are a few groups of workers that are vulnerable in today’s job climate: younger workers, those under 25 years of age, especially recent college graduates, and Black and Asian workers.

Taking a rear view look at the beginning of the year, “Through February, employers announced 156,742 job cuts, the lowest January-to-February total since 2022, when 34,309 cuts were recorded in the first two months of the year. It is the fifth-highest January-February total since 2009.”

“February’s dip is a nice reprieve from the elevated job cut plans to start the year. With U.S. involvement in a growing war in Iran, the end of Q1 may bring more layoff plans as companies tighten belts amid uncertainty and higher costs,” said Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas,” in their statements posted on their website.

In a forecast for the future, based on their prior analysis, “Hiring plans rose 140% in February to 12,755 from 5,306 in January. They are down 63% from the 34,580 hiring plans in February 2025. So far this year, employers have announced plans to hire 18,061, down 56% from 40,669 new hires during the same period in 2025.”

Wages increased by 0.2 percent after reaching 0.4 percent in February, and further decreases with higher inflation dependending on the continuing war in the Middle East could cause American consumers to cut back on their spending and with further layoffs, earnings of Big Tech firms, reportedly 32 percent of the S&P 500’s value would sink pulling downwards at the top of the K, according to Dario Perkins, an economist a consultant at TS Lombard, reported This Week.

Taking an even broader look we are still seeing the K shaped economy that we noted last month, the “golden age” that Trump says Americans are living in, most industries are in a hiring freeze inflation is still at 2 percent, and with the richest 1 percent holding nearly 32 percent of the nation’s wealth as they also reported, the future for America’s working families remains uncertain.

With income equality still a present reality there is speculation as to whether it will last or not, but Mark Zandi chief economist at Moody’s Analytics, said to them “This is not a cyclical or temporary phenomenon, he said, noting that it’s “structural.”

Of course, the Israeli-American war and the loss of access to the Strait of Hormuz has increased the cost of gasoline to over $4.00 a gallon and in some stations in Chicago we have seen prices of regular gasoline as high as $4.59 a gallon. Consumers, especially those with children will be hard pressed to balance the family budget with increasing rents, a shortage of affordable housing, and  the higher cost of food, already seen in some areas.

Of note, “This is not the kind of oil shock economists typically look through. Those tend to hit both sides of the equation at once, slowing growth while raising prices, and eventually wash out. This one “is more COVID-esque,” Swonk said, pointing to supply-chain disruptions that extend far beyond crude—from diesel and jet fuel to helium, a key input in semiconductor production. Swonk said CFOs she has spoken with are watching shipping costs soar after the transportation sector had just begun recovering from a recession.”

Recently released figures from the BLS on the Consumer Price Index show that "In March, the Consumer Price Index for All Urban Consumers rose 0.9 percent, seasonally adjusted, and rose 3.3 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased 0.2 percent in March (SA); up 2.6 percent over the year (NSA)."

Add that to the cost of producing crops and the increasingly high costs of fertilizer, {the  US is the world’s highest consumer},not to mention the cost of transporting food, the golden age looks deeply tarnished, and despite the repeal of some tariffs by the US Supreme Court, some farmers are still reeling from the president’s tariffs, specifically those that were not able to make purchases before the tariffs hit. To make matters worse, agricultural economists are predicting a 40 percent increase in the cost of fertilizer creating possible food shortages in American supermarkets.

Taking the long view of the March numbers is Federal Reserve Chair Jerome Powell who said, “You can have a series of these supply shocks and that can lead the public generally — businesses, price setters, households — to start expecting higher inflation over time. Why wouldn’t they?” Jerome H. Powell, the Fed chair, said at an event this week” reported The New York Times.

Despite this risk, Mr. Powell did not convey any immediate urgency to take action, saying instead that the Fed’s policy was “in a good place for us to wait and see how that turns out.”

Updated April 12, 2026