There was also a change of heart by the administration on who President Trump might have chosen to lead the department, after his first choice E.J. Antoni withdrew due to widespread criticism of his lack of statistical experience, and his partisan criticism of established methodology used by the BLS; but, it's worth noting that the commissioner merely “blesses” the final product, not researching it and writing it. As of this date, the position is vacant and it's a guessing game on who might be nominated.
Private employment also faces a downturn
What we do have is the ADP report which bundles statistical date for private employers, and while some economists have given less weight to it, than others, based on methodology, and accounting for its usual non alignment with the BLS, nevertheless it is all that we have right now, and at this moment in time, it seems that the starts might be aligning with what has been garnered in part at least from other data sets.
As seen in the August BLS report, US employment has taken a downturn, some say inevitable, after earlier highs post COVID, but also by the “on again-off again” tariffs promulgated by Trump, and which has created a great deal of uncertainty for employers, since they don’t want to hire based on a guess or a maybe; and, with so many industries dependent, on parts from other countries, this is a risk not worth taking.
For private employers, the ADP showed a loss of 32,000 jobs, a significant drop, and reflects in large part tariff uncertainty with some of the largest losses in key areas of trade, transportation, and utilities, causing many to wonder what the future might hold, a concern for market analysts worried about a pending recession.
In one of those economic conundrums, consumers, the main drivers of the American economy have continued to spend albeit with steady wage increases, averaging 4.5 percent, coupled with lowered inflation, but there are also fears of stagflation hovering on the horizon.
Retail, which had been considered hardy, lost 19,000 jobs and may be attributable to consumer uncertainty, especially from those that have been laid off from federal jobs in the early months of the Trump administration.
Recent college graduates face uncertain job market
College graduates with the ink barely dry on their diplomas are facing hurdles that even a decade ago were unheard of, and taking in the analysis by The Carlyle Investment group which has reported job growth at 1.7 percent, there is cause to worry which adds to those concerned whether the cost of a 4 year degree is worth it, and with an uncertain future, and a future saddled with school debt, this group is facing an uphill struggle; and, especially noting that there is a 7,18 percent in new job openings that the BLS reported in August supports their concern.
One area of growth shown by the ADP was ironically, education, but that might be more of an outlier, rather than an indicator; but another side of private employer growth is health care, and as we’ve seen over the last several months, that may be attributable to the increasing longevity, and care of older Americans.
Of ever increasing concern is the threat of AI taking jobs that once were populated by researchers, together with call center agents who handled complaints, both online and by phone, and now are likely to be answered by generative AI; and, while some praise the efficiency of such models others fear displacement.
Whether AI will necessitate re-calibration, or taking a directive role is open to debate and once again takes us back to education, where educated employees are required, but recent statistics only show that 34 percent of all Americans hold an undergraduate degree, with those in the sciences, even less, and as research funds have been cut by the Trump administration, the need for such roles have been diminished and many of statisticians, researchers, and tech people are moving to the more receptive areas of Europe.
Interest cuts projected to continue despite criticism
September brought an interest rate by the Federal Reserve's Open Market Committee who cut its benchmark interest rate by a quarter of a point to the new rate of 4.00 to 4.25 percent, a move that had been long predicted, and was based on the August Jobs Report by the Labor Dept., that showed non farm jobs drifting downward to 22,000.
“There’s very little growth, if any, in the supply of workers. And at the same time, demand for workers has also come down quite sharply, to the point where we see what I’ve called a curious balance,” Powell said.
This was not enough for President Trump who has long called for a greater cut, of at least 3 percent, but which economists have warned could lead to inflation. And, it’s well known that, in this desire, the president has verbally pummeled Fed Chair Jerome Powell, and wants to have greater control over the Federal Reserve, an independent entity founded in 1913, whose twin mandate is full employment and 2 percent inflation.
Trump has tried to chip away at the board by attempting to fire governor Linda Cook on an alleged fraudulent mortgage claim, that, on appeal, she is allowed to continue to serve; but, Trump wants a ruling, in his favor by the US Supreme Court.
As reported, “Powell said that while the Fed expects inflation to increase due to Trump’s tariffs, the bank is seeing the labor market take far more damage under the weight of higher import taxes and steep cuts to immigration.'
“Our policy had been really skewed toward inflation for a long time. Now we see that there’s downside risk, clearly, in the labor market, so we’re moving in the direction of a more neutral policy.”
That weakening jobs report was an important factor in the interest rate cut, and with the current inflation rate at 2.9 percent, better than its high of 3.0 percent, but not low enough to meet the mandate. And, to that effect, two more rate cuts have been penciled in for the rest of the year.
Friday night massacre decimates federal workforce
In what was seen by many as a calculated move by the president: 4,100 federal employees were laid off on Friday, and some may be permanently fired as Trump faces a loss of tax revenue from his tax cuts.
As of publication date, there is no real guarantee they will be repaid when the government reopens, despite a law signed in 2019 by Trump himself.
The job “cuts”, however they are termed, have been significant and of those,Treasury alone had a loss of 1,446, with Health and Human Services between 1,110 and 1,200, and Education totaling 466.
Also on Friday it was also reported that staff members and scientists of the Centers for Disease Control were cut, and as MSNBC reported, “Health Secretary Robert F. Kennedy Jr. moved one step closer to his goal of dismantling the nation’s premier public-health agency by dismissing more than 1,000 scientists, doctors and public health officials from the Department of Health and Human Services late Friday night.”
“The firings ran across more than a dozen CDC divisions and centers, wiping out entire offices and teams that investigate disease outbreaks, manage infectious disease responses, collect data, publish scientific reports and communicate with global partners and Congress,” they added.
More alarming was that, “In a move that may alarm lawmakers, the CDC’s entire Washington office was also cut. That office served as the agency’s conduit to Congress and to the broader Washington, D.C., public health community.”
After a New York Times report on the firings, some key scientists were rehired, and, “The Trump administration on Saturday raced to rescind layoffs of hundreds of scientists at the Centers for Disease Control and Prevention who were mistakenly fired on Friday night in what appeared to be a substantial procedural lapse.
Among those wrongly dismissed were the top two leaders of the federal measles response team, those working to contain Ebola in the Democratic Republic of Congo, members of the Epidemic Intelligence Service, and the team that assembles the C.D.C.’s vaunted scientific journal, The Morbidity and Mortality Weekly Report.”
In what some are calling The Friday Night Massacre, "The agency’s entire Washington office, which was laid off on Friday, will not be rehired. Nor will employees of the office of the director of the center for injury prevention, or those at the division of violence prevention policy.
“This is going to be devastating to Americans and to the global community,” said Dr. Debra Houry, who served as the agency’s chief medical officer before she resigned in August in protest against the administration’s policies.
“They are dismantling public health,” she added,” reported the Times.
That aside, working families of the CDC and military service members will not be paid threatening mortgages, groceries, children’s education, and as previously mentioned that backbone of the American economy, consumer spending.
On Saturday media reported Trump saying he had ordered Department of War Director Peter Hesgeth to find money to pay the service members
Meanwhile, more layoffs were made: ”Current and former employees at the Substance Abuse and Mental Health Services Administration (SAMHSA) told NPR about the layoffs, which were part of a government-wide reduction in force. The sources, who were not authorized to speak publicly about the agency, said the layoffs came late Friday, as the nation's government shutdown dragged on,” reported NPR. more than 100 employees were affected, and many more are expected.
Less than 10 days before, there were news reports that 300,000 less workers were expected through federal job cuts by December, more than were cut in January, which prompted unions representing those workers to preemptively sue the Trump administration, “claiming that it did not have the legal authority to conduct mass layoffs under cover of a shutdown,” reported the Times.
Partisanship kills jobs in Democratic led cities
Political retribution towards large Democratic cities such as New York, seems to be in order for the president and he has made moves, according to the Times, “to cancel $26 billion “in previously approved funds across a wide range of programs, describing the money as wasteful or in need of further review.”
For two major projects - counterrorism protection and New York tunnels and subway improvements were projected to lose $187 million and $18 billion respectively, affecting protection of threats from foreign adversaries, and infrastructure that limits the movement of commuters and the local economy, not to mention the hundreds of employees, including first responders, and increased tax revenue.
Local media reported that it was later decided to reverse the cuts to
counterrorism, after a call to the president from New York Governor Kathy Hochul, and reported by Republican lawmaker Nicole Malliatoakis: “President Trump confirmed the restoration on Friday in a post to Truth Social, saying: “I am pleased to advise that I reversed the cuts made to Homeland Security and Counter terrorism for New York City and State. It was my Honor to do so. Thank you for your attention to this matter!”
What remains cut is the cut that “impacts the Hudson Tunnel Project, a centerpiece of the broader Gateway Program, and the Second Avenue subway extension,” and the jobs of trade workers destined to do the work, and the loss of income will affect the livelihoods of hundreds of workers, and their families.
It’s almost impossible to discuss the American economy, and jobs, without addressing the political divide, and now entering the third week of the US shutdown, it may be equally impossible to predict what will, or won’t happen.
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