“Hurricane’s Eye”: Why did the US labor market spill, says economist

The US Labor Market shows signs of gradual weakening. However, the new federal data published on Friday suggest that it could hit a long -term wall.

“We are in the eyes of a hurricane,” wrote Daniel Zhao, the chief economist in the career of Site Glassdoor.

“After months of warning signals, July jobs happen that the slowdown is not just approval – it’s here,” he wrote.

Employers added only 73,000 jobs in July, the Labor statistics reported on Friday. This sum is less than expected.

Economists generally think that the US economy must add about 80,000 to 100,000 jobs per month to maintain a step with the growth of the population, said Laura Ullrich, director of economic research for North America on the site of work.

The July picture suggests that the labor market does not maintain the pace with the growth of the population – and therefore closes, she said.

Even more concerning the numbers of June: Data on the growth of May and June were much weaker than they originally thought, the economists said.

BLS revised employment data for these months, for which they had been in 19,000 jobs added in May (a decline from the initial 144,000) and 14,000 in June (out of 147,000).

Everyone said, employers added 258,000 fewer jobs than they originally thought.

Such monthly revisions are typical of other BLS data from businesses and government agencies, but these added were unusually large, economists said.

It is not clear why, they said.

“Really, it’s just showing a very soft labor market,” Ullrich said. “It’s not disastrous. Yet they are very weak numbers of work,” and not something one would expect in a strong economy, she said.

The numbers could be revised again in August, the economists said.

Growth of jobs over the last three months average when charged revised data. On the other hand, job growth on average 111,000 per month in the first three months of 2025.

The new jobs were also largely concentrated in the healthcare and social assistance industry, which means that opportunities were not based on a broad foundation, the economist said.

The data “tells a completely different story about the labor market than what Wy initially means,” Zhao Glassdoor said in an interview.

“We were under the impression that the labor market was holding a surprise resistant to economic winds such as tariffs,” he said.

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President Donald Trump announced a number of new tariffs on Thursday, with several business partners on several business partners ranging from 10% to 41%.

Tarifs are taxes that American companies pay for items they import.

Tarifs, when they are kept in place in the long term, generally increase prices for consumers and print profits for many business? In addition, Trump’s approach to attack on tariffs creates uncertainty for businesses, which leads to much to receive back in hiring, Economist said.

Since 2014, the National recruitment rate has been the lowest, except the first days of Covid-19 pandemia.

“It is hard for people to decide or change so much insecure,” Ullrich said.

The tariff policy of the compounds of other headwinds, such as immigration policy that reduces the number of available workers, reduces federal working expenditure and government expenditure and higher interest rates, Zhao said.

There are other indications on the US labor market, economists said.

For example, the degree of work forces fell to its lowest level of sales 2022, Thomas Ryan, North America’s economist in the capital economy, wrote on Friday in the note.

This is “potentially further evidence that President Trump’s immigration intervention maintains undocumented migrants outside the labor market, even if they remain in the country,” he wrote.

The unemployment rate also increased to 4.2% in July, from 4.1% in June, BLS reported.

The share of unemployed Americans who are long -term unemployed, which was out of work for more than six months, increased to almost 25% of 21.6% of July 2024 sales, BLS said.

One silver lining for workers: The release remains near the historical minimum.

However, the environment of low release, hiring and quitting creates challenges for job seekers.

“There is a high degree of stagnation right now,” Ullrich said. “There is not much movement in and out of work.”