Noisy Jobs Report Offers Little Comfort for Jobseekers Across Stumbling Economy

WASHINGTON, D.C. – Today’s jobs report shows the economy added 162,000 jobs in August, while the unemployment rate held steady at 4.1%. Job gains averaged just 31,000 per month over the past year and labor force participation remains near recent lows at 61.6%.

Today’s noisy report offers little guidance for policymakers navigating the difficult waters of persistent inflation and a sluggish labor market that continues to look fragile under the hood. Those looking for a clear indication of a labor rebound will be left disappointed. Restaurants and bars drove more than one-third of job growth over the past month, and back-to-school season hiring drove roughly one-fourth. Wage growth slowed further in August, falling to 3.1% over the past year for private sector workers, the weakest in four years and below last month’s inflation rate. As Trump continues to impose new tariffs and wage his war on Iran, fueling inflation, working families are stretching paychecks to the brink. The average duration of jobless spells is 26.3 weeks – up more than a week from July – and nearly 2 million Americans have been unemployed for more than six months.

Groundwork Collaborative’s Vice President of Policy, Advocacy, and Research, Elizabeth Pancotti, released the following statement:

“Policymakers should look past the noise of today’s jobs report. Hiring remains concentrated in limited sectors of the economy. Worse, gains in the health care industry, which has propped up the job market for the past two years, have stagnated as we stare down the economic effects of the Republican budget law’s Medicaid cuts. Minimal wage gains continue to be drowned out by rising prices stemming from Trump’s war in Iran and ever-changing tariff regime. While this month’s report may look like the labor market has turned the corner, make no mistake – Trump’s economy is on life support.”

To speak with a Groundwork expert about the ugly underbelly of this month’s jobs report, email press@groundworkcollaborative.org.

BACKGROUND

Hiring was not economy-wide, and slowing health care growth signals pain to come

• Restaurants and bars drove more than one-third of hiring, while the back-to-school season prompted 42,000 gains in local government education jobs.
• Over the past two years, job gains in health care have driven the vast majority of growth. This has now slowed to just 13,000 gains in August, which foreshadows the harmful economic effects to come as the Medicaid cuts from the Republican budget law begin to go into effect.
• Despite promising a manufacturing renaissance, the industry has lost 35,000 jobs since Trump took office. The automotive industry shed 4,500 jobs in August alone.
• Pullback in white-collar industries is significant: IT has shed 115,000 jobs over the past year – including 23,000 in August alone – and financial services are down 99,000.

Millions of workers are stuck on the sidelines.

• Long-term unemployment is rising. 27% of unemployed workers have now been searching for work for at least six months, up from 25% a year ago. The average duration of unemployment is now six months.
• The unemployment rate for workers without a college degree rose to 4.4% in August, up 4.0% in July. The unemployment rate among Black workers (6.0%) remained steadily above that of white workers (3.7%).

Trump’s higher prices continue to eat away at workers’ paychecks.

• Prices are rising faster than workers’ paychecks. Average hourly earnings increased 3.2% over the past year in July, while prices rose 3.7%. The latest escalation in the conflict is likely to keep prices elevated, giving consumers little reason to expect relief in the coming months.
• Fewer consumers expect their incomes to improve in the months ahead. In August, just 17.6% expected their income to increase, down from 19.5% in July, according to the Conference Board.