July Jobs Report is a Wake-Up Call, Says Groundwork’s Jacquez

July Jobs Report is a Wake-Up Call, Says Groundwork’s Jacquez

Trump’s Policies Are Dragging Down Our Economy, Steering Us Toward Stagflation

This week, economic data painted a dire picture of an economy losing steam under President Trump’s management. In July, the economy added just 73,000 jobs — a sharp slowdown — and the unemployment rate ticked up to 4.2%. At the same time, jobs gains from May and June were significantly revised down by more than 250,000 jobs. With Trump’s erratic trade war continuing to drive uncertainty among consumers and businesses alike, key indicators — including rising prices, slow-growing GDP, and softening in the labor market — confirm that the first six months of the second Trump Administration have wrought major damage to the U.S. economy.

Groundwork Collaborative’s Chief of Policy and Advocacy Alex Jacquez reacted with the following statement:

“Today’s jobs report is a wake-up call. Trump’s policies are dragging down our economy and making life harder and more expensive for working people. The sharp downward revisions for the last two months reveal that Trump’s reckless trade agenda has done far more damage to the labor market than previously understood. Excluding the health care sector, the U.S. has lost jobs for three months straight, and, despite promises of an industrial revival, there’s no sign of it in these numbers. Manufacturing jobs have shrunk for three months in a row, and construction jobs are stuck in neutral.

“This was supposed to be a defining week for the President’s handling of the economy, and it was — just not in the way he hoped. Key indicators like labor force participation and long-term unemployment are flashing red, prices are going up, consumers are pulling back, and the economy is slowing down. No matter how Trump tries to spin a win, the reality is clear — his policies are steering us toward stagflation and working families are paying the price.”

This week in the Trump Slump, new polling and economic indicators continue to show that President Trump’s actions are deeply unpopular and hurting the economy.

Polling: 

• Navigator Research found that Americans continue to be sour on the economy with 63% rating the U.S. economy negatively. The poll also found that a majority (53%) of Americans feel behind financially, and over a quarter (28%) are “far” behind. Fifty-four percent blame Trump’s tariffs for rising prices, and groceries, housing, and utilities costs are the biggest pain points for Americans.
• A new Reuters/Ipsos poll reported that Trump’s approval rating is 40%—the lowest of his term so far—and only 38% of Americans approve of his handling of the economy.
• The latest Economist/YouGov poll also shows Trump’s overall approval rating at its lowest of the term at 40%, with his handling of inflation and prices at just 34%.

Economic Indicators: 

• The Bureau of Labor Statistics reported that the economy added 73,000 jobs in July, while the unemployment rate ticked up to 4.2%. Revisions for May and June were larger than normal, with the change in total nonfarm payroll employment for May being revised down by 125,000 and the change for June being revised down by 133,000.
• The Bureau of Economic Analysis reported that the PCE price index increased by 2.6% over the past year.
• While headline GDP grew by 3% in the second quarter of 2025, the rebound from Q1 was largely driven by wild trade swings. Exporters rushed shipments ahead of potential tariffs, while imports slowed after businesses had already filled inventories. These short-term moves padded the GDP number but don’t reflect stronger underlying growth. Further, a look under the hood shows final sales to private domestic purchasers, a proxy for underlying domestic demand, fell below last quarter, consumers have pulled back on spending, and investment fell.
• The Bureau of Labor Statistics Job Openings and Labor Turnover Summary found that the number of job openings was little changed at 7.4 million in June. The number of job openings decreased in accommodation and food services, health care and social assistance, and finance and insurance.
• The Federal Reserve held interest rates steady for the fifth consecutive time, citing increased uncertainty surrounding Trump’s economic policies.
• The Conference Board Consumer Confidence Index reported a two point increase compared to last month, remaining below last year’s levels. Eighteen percent of consumers noted that jobs were harder to get in July, ticking up from 14% in January.
• The Mortgage Bankers Association’s seasonally adjusted index showed that total mortgage application volume dropped 3.8% last week.

Expert Commentary: 

• Federal Reserve Chairman Jerome Powell spoke about Trump’s trade war after announcing the Fed’s decision to hold interest rates steady: “The effects of tariffs on inflation could take a good bit more time to play out. We’re still a ways away from seeing where things settle down. It doesn’t feel like we’re close to the end of that process.”
• Heather Long, Chief Economist at Navy Federal Credit Union, said the labor market “now looks a lot weaker than expected” following the July jobs report and downward revisions to previous months’ gains. “Companies do not want to hire or invest with this much uncertainty about tariffs, inflation, etc.,” she said.
• Seema Shah, Chief Strategist with Principal Asset Management, said about the July jobs report: “Not only was this a much weaker than forecast payrolls number, the monster downward revisions to the past two months inflicts a major blow to the picture of labor market robustness. What’s more concerning is that with negative impact of tariffs only just starting to be felt, the coming months are likely to see even clearer evidence of a labor market slowdown.”
• Joel Kan, Vice President and Deputy Chief Economist at the MBA, said about decreased mortgage application volume: “Mortgage applications fell to their lowest level since May, with both purchase and refinance activity declining over the week. There is still plenty of uncertainty surrounding the economy and job market, which is weighing on prospective homebuyers’ decisions.”
• Groundwork Collaborative’s Executive Director Lindsay Owens reacted to Groundwork’s new report showing how President Trump’s erratic tariff policies are providing corporations with ample opportunity to hike prices on consumers: “President Trump’s turbulent trade policy has created a perfect storm of market chaos, giving corporations a golden opportunity to jack up prices, pad profit margins, and fleece Americans simply because they can. We already know that when inflation started to tick up, companies exploited market conditions to charge consumers more and rake in record-breaking profits. It turns out the corporate playbook on tariffs is exactly the same. While Trump’s tariffs continue to cause economic upheaval, corporations are exploiting the chaos and working families are left to foot the bill.”
• Groundwork Collaborative’s Senior Advisor for Economic Policy Emily DiVito responded to the IRS shuttering its Direct File program after two filing seasons: “The Trump Administration’s decision to end the IRS’s Direct File program is a clear win for corporate tax prep giants and a real loss for working people. Direct File was proof that the government can work for all of us; not just the wealthy and well-connected. At a time when the Republican budget law will make life harder and more expensive for families, shutting down Direct File will cost taxpayers millions in filing fees and wasted time each year. Billy Long’s decision to end the program confirms what we already knew: this Administration doesn’t care about making life easier and more affordable for working families.”