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US Likely Added 65,000 Jobs in August 09/04 06:18
The U.S. Labor Department is expected to report Friday that the American job
market bounced back last month from a dismal July, even though jobseekers
continue to struggle and pay gains are slight.
WASHINGTON (AP) -- The U.S. Labor Department is expected to report Friday
that the American job market bounced back last month from a dismal July, even
though jobseekers continue to struggle and pay gains are slight.
And the employment outlook remains clouded by a shortage of workers -- the
result of President Donald Trump's immigration crackdown and the retirement of
baby boomers -- and by businesses' stepped-up use of technology to do tasks
that human beings used to do.
The August jobs report likely showed that U.S. employers -- companies,
government agencies and nonprofits -- collectively added a net 65,000 jobs last
month after they unexpectedly slashed 23,000 in July, according to a survey of
forecasters by the data firm FactSet. Economists expect jobs at local schools
to recover after plummeting by 50,000 in July in what they suspect was a
statistical glitch in the Labor Department's seasonal adjustments.
The unemployment rate is expected to have ticked up to a still-low 4.2% last
month from 4.1% in July, FactSet says.
"It's a very strange labor market,'' David Kelly, chief global strategist at
J.P. Morgan Asset Management, wrote in a commentary Monday.
The No. 1 puzzler: Hiring is weak, but layoffs are rare.
Employers haven't been eager to take on new workers. The Labor Department
reported Tuesday that gross hiring -- before subtracting people who lost or
left their jobs -- fell 5% to fewer than 5.1 million new jobs.
In July, companies, government agencies and nonprofits together cut 23,000
jobs. So far this year, employers are adding 61,000 jobs a month, up from the
9,700 they averaged last year -- the weakest hiring outside a recession since
2002. The lingering effects of high interest rates and Trump's erratic trade
policies discouraged companies from hiring in 2025.
Even though it's rebounded from a bleak 2025, hiring this year remains well
below the 166,000 monthly jobs created, on average, in 2023 and 2024, let alone
the 491,000 a month recorded during the 2021-2022 hiring boom that followed
pandemic lockdowns.
But the United States doesn't need as many jobs as it did until recently to
keep the national unemployment rate from rising. Trump's immigration crackdown
and baby boomer retirements mean fewer people are competing for work. More than
1.3 million people have dropped out of the U.S. labor force over the past year.
As a result, the "break-even'' rate of monthly hiring, 155,000 in 2023-2024,
has dropped, perhaps to nearly zero, according to a Federal Reserve study.
The Trump administration's decision to withdraw work authorization for
330,000 Haitian and Syrian immigrants on July 27 is likely to worsen labor
shortages, especially for specific workers such as caregivers. But the Haitians
and Syrians won't show up in the official unemployment rolls because they
aren't allowed to look for work and therefore can't be counted among the
jobless.
Instead of looking to hire from a diminished pool of available workers,
"businesses are increasingly focused on boosting efficiency through technology
and AI and increasingly seek to do more with their existing workforce,''
EY-Parthenon economists Gregory Daco and Lydia Boussour wrote in a commentary
this week.
Still, even if they aren't hiring aggressively, companies are reluctant to
let go of the staff they have. They retain memories of the unexpected labor
shortages that followed the end of COVID-19 lockdowns.
So unemployment remains low. For the past year, the number of people
applying each for unemployment benefits -- a proxy for layoffs -- has stayed in
a historically low range of around 200,000 to 230,000.
The result is what economists call a "no-hire, no-fire" labor market in
which those who have work enjoy job security, but times are tough for young
workers trying to land entry-level jobs or unemployed people seeking to get
back to work.
Wage gains last month were likely modest -- bad news for families already
struggling to keep up with the high cost of living. EY-Parthenon's Daco and
Boussour expect average hourly wages rose just 3% last year from a year
earlier, the weakest year-over-year gain since May 2021 when the economy was
paralyzed by the pandemic.
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