Federal & State Governments Shed 28,000 Jobs in August. Private-sector hiring machine slows, waiting for clarity, but layoffs remain very low.
By Wolf Richter for WOLF STREET.
Total nonfarm payrolls rose by 22,000 in August, to 159.5 million jobs; July job gains were revised up to 79,000; June was revised to a loss of 13,000 jobs.
The three-month-average job gain slowed to 29,000, according to the Bureau of Labor Statistics today.
Hefty job losses at federal and state governments.
Losses of civilian jobs at the federal government reached 15,000 in August. Over the past three months, the federal government shed 34,000 jobs (three-month average job loss of 11,000). Since January, the federal government has shed 97,000 civilian jobs.
The government flipped from a job creation machine through 2024 to a job shedding machine in 2025.
This does not include jobs at government contractors, whose job losses due to canceled or paused government contracts show up in private sector categories, such as Professional & business services, Information, and other sectors.
State governments shed 13,000 jobs in August, the fourth month in a row of job losses. Over those four months, state government shed 33,000 jobs.
Combined, federal and state governments shed 28,000 jobs in August and 56,000 jobs over the past three months.
Excluding federal and state governments, employers created 50,000 jobs in August and 144,000 over the past three months, or a three-month average of 48,000 additional jobs.
The first chart reflects total job gains and losses, monthly (blue columns) and three-month average (red line). The second chart shows the same but without federal and state jobs.
Here we’re looking at payroll changes without federal and state governments. So this is a fairly slow job growth, even without the distortions from the federal and state jobs.
Civilian jobs at the Federal government have dropped to 2.92 million in August, the lowest since May 2023, undoing much of the 2022-2024 hiring binge.
But these are workers on government payrolls, and they do not include the workers who are employed by companies and work on government contracts. The job shedding from the efforts to reduce government spending has spread into the private sector and shows up in private-sector categories:
The share of civilian jobs at the federal government dropped to 1.83% of total nonfarm payrolls, the lowest in the data going back to 1939.
In 2022-2024, the substantial job growth at the federal government contributed to total job growth. This year, the opposite has been the case – growth in total payrolls was weakened by the substantial decline in federal government jobs.
Average hourly earnings rose by 0.27% in August from July (3.3% annualized, blue), according to the establishment survey by the BLS today.
The three-month average growth (red) rose by 3.4% annualized. Both, the monthly gain and the three-month average gain, were a deceleration from the growth rates in July, but were above the growth rates in June.
Wage growth is at the top end of the range that prevailed during the strong labor market in 2018 and 2019 and above prior years.
Year-over-year, average hourly earnings rose by 3.7%, a deceleration from July, and still above the highs before the pandemic.
Unemployment rose by 148,000 in August to 7.38 million people who were actively looking for a job during the survey period.
But the labor force surged by 436,000 in August to 170.8 million (working people and unemployed looking for a job), which played a big role in the increase of the unemployed, as not all of the new entrants in the labor force were able to find jobs, and so unemployment rose.
The headline unemployment rate (U-3) ticked up by 7 basis points to 4.32% in August, up from 4.25% in July. Since June 2024, the unemployment rate has been in the historically low range of 4.01% to 4.25%. August was the first reading above 4.25%.
An unemployment rate of 4.3% is historically relatively rare and indicates a balanced labor market. And it remains below the Fed’s median projection at the June meeting of 4.5% for the end of 2025.
What to make of it?
Heavy job losses at the federal and state governments (28,000 in August, 56,000 over the past three months) plus some job losses at government contractors are weighing on the labor market, where job creation by the private sector has slowed sharply.
Then there is the crackdown on illegal immigration: For example, construction shed jobs in part due to the crackdown on illegal immigrants, many of whom work in construction. Just today, the government announced that 475 illegal immigrants were arrested at the construction site of a Hyundai EV battery plant in Georgia. The raid followed other raids on construction sites. Construction companies have complained about scared workers not showing up for work and not being able to find workers. And these are contributing to job losses in construction. They’re not the only factor, but they contribute. Since April, the construction sector has lost 42,000 jobs, after a large surge.
But job openings in the construction sector have risen in recent months, per the JOLTS data.
And yet, layoffs remain historically low – this has been a theme for over a year: Employers are laying off workers at a historically low rate, same rate as a year ago, and below two years ago, as we can see in the initial applications for unemployment insurance.
In addition, people have stopped quitting jobs, and so the churn in the labor market has calmed down a lot, with employers hanging on to their people, and people hanging on to their employers.
So there are fewer open slots, and it takes longer to find a suitable open slot than it did during the tight labor markets in 2018-2019 and in 2022-2024. We can see that in the number of people who continue to claim unemployment benefits. But those continued claims for unemployment insurance, though up from the tight labor markets, are still below the record lows of the decades before 2018.
So the private-sector hiring machine has slowed down for a variety of reasons — and different reasons in different sectors — with many decision makers putting projects on hold, waiting for clarity perhaps. But they’re not laying off workers.
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Nevertheless, one can infer from your “Payroll Change without Fed & State Gov” graph that the momentum in NFPs slowed after April. The question is whether management simply took a cautious pause in hiring—choosing to avoid adding fixed costs and operating leverage during a period of uncertainty—and whether they will resume hiring as soon as the perceived risk around tariffs begins to ease.
With automation increasing, who knows . . .
100,000 federal employees let go…
“The total number of US federal employees varies depending on the definition used, but recent estimates show the number is around 3 million people, including the U.S. Postal Service and active-duty military personnel. However, if military personnel are excluded as they are not typically considered federal “employees,” the number is closer to 3 million people that include the U.S. Postal Service, or slightly over 2.4 million if the Postal Service is also excluded”
100k let go…which brings us “all” the way back to…what, ye olde mid-2023?
All the way back to… the entire period from 1984-1994. And 1981. And 1969. And 1943-1945.
As so many people have told you, and you continue to ignore because it doesn’t fit your bias, the number of federal employees has been pretty much constant since 1966 at around 3 million.
If it makes any gov’t haters feel better, during the 20 years I was at the P/O (previous 20 years in all sorts of jobs, from 4 people to 1100) we installed and maintained many types of machines that eliminated 2-3-4 hundred thousand clerk, carrier, and mail handler jobs. (out of about 800,000 total) That was about the time the Sacklers got everyone hooked on “safe” Oxy, so they had a pastime, anyway.
Anyway, that allowed them to close/consolidate many facilities and eliminate some more of us maint folks…..but they did raise the maint pay scale a bit after I was gone…….probably lowered the others.
What good is a union that can’t strike? Make the custodians clean the bathrooms better? Get better worklight? More heat or cooling? Stop idling diesel exhausts from coming onto loading dock and then inside?
They also screwed the truck drivers worse…..much tougher hours to drive routes, less money……and STILL must arrive and leave ON TIME. You know why? Because mail CAN NOT STOP MOVING……there is NO place to put it all.
I bet managers make more…..they ALWAYS do….they make ALL the rules…….you see?
From what I hear it is hell working there now for every worker bee, but its a paycheck.
If you worked for the USPS for 20 years, aren’t you eligible for a good pension?
Numbers – now do federal contractor numbers.
Nope….under FERS you get 1% of your high three for every year you were in (prior to 1984 under CSRS you got 2%)
FERS was designed to get you into the TSP where you could play the market, (and various funds), they put in1%, your max was 10%. I never trusted stocks so I stayed in the “G” fund which was non-marketable treasurys yielding about what a 7 year did. I had to “buyback” my Army time (few hundred) to get to almost 20 years total service. I had $121K (the guys in stocks were much better, maybe $300K) but I wanted certainty as I was building a house on bare off grid land I bought in 1990. I used most all the $121K plus what I was earning and was up there every single weekend, plus material shopping during the week.
I worked graveyard for extra pay and took weird days off so I had stores to myself.
I quit at 55, so 5% was removed for every tear before 62.
I have $110 in taxes taken out and Blue cross takes what it wants (lo plan). The COLA is NOT calculated the same (as gov’t haters pick on P/O a lot) so for the last three years due to health ins, I got $330, $315, and now $275/mo. Plus Soc Sec $1623 and bit now on $40k CD. Rent is $1400/mo and going up soon, new units are $1600. Plus all the other shit like internet, TV, and cell phone…and road fees on the property I have…like an HOA, so my CD is dropping.
Yeah, I’m really living it up on the Gov’t dime!!!!!!!!!
Let the rest of them think I’m lying and taking their precious tax dollars in my lavish gov’t pension. I really don’t care and as you know don’t insult easy if one of them has the balls to mention it to me.
Told you Biologists and MBAs don’t think the same! ;-)
They should all pay more attention to my dietary suggestions…..things are not getting easier for the common man, which you still are…..what, net $5M max?
I would appreciate an email to know where I stand……I still like contributing and pointing out lies and hypocrisy and so should you, no? I’m getting more tactful like Dustoff…..he and I are a lot alike, except he tried to save lives and I killed people. Not very proud of “serving my country” by killing human beings…we didn’t know VC from poor peasants……had a buddy killed by a kid about 10….with one of our grenades..especially in that stupid no reason war…..I hate thinking about it all, except with Dustoff….he knows.
The stall in housing is taking its toll. Combined with Trump uncertainty, things have slowed.
Whether a 5OBP cut will catch the decline is anyone’s guess. But without question in my mind, we’re in for some volatile times.
Buckle up.
The only uncertainty is how far will radical judges go to block Trumps efforts to fix years of big government damage.
You mean the check and balances?
Robert,
Do you plan to be in the carriage, or just a sparrow? I have seen some cults in my life, but damn, man.
PS; Will I be forced to take Bible school again……..Vance could easily be a distant cousin.
I wish Wolf would put up a pic of Trump’s Tower home interior decor…(for insight purposes). ALL his selection…before Melania……I would get sick after 15 min in there….honest!
This post is all economically related……actually…not much isn’t, unfortunately…..would putting $100 in stocks and bonds help?
“Since April, the construction sector has lost 42,000 jobs, after a large surge. But job openings in the construction sector have risen in recent months, per the JOLTS data.”
Putting these two together suggests some of those able-bodied workers will need to consider a career change to construction. The question is whether Americans will get the memo & step up. For example, college, IMHO, is rapidly becoming a less desirable path.
As part of Trump’s reduction in the Federal DOE, he needs to push states further along with this re-alignment by strengthening non-college career readiness.
President Trump changed the head over the Bureau of Labor Statistics just so this kind of slow growth jobs report wouldn’t happen.
Recently President Trump hosted all of the tech sector leaders saying job growth was going to be extensive.
Probably next month’s job growth will be dramatically better as the BLS workers clear out all that old data and substitute some much better job creation statistics.
So BLS will became BSL
With the abnormally large BLS revisions of the last few years, the BLS wasn’t doing a particularly good job to begin with.
In the era of the internet, it is kinda of hard to see why sampling estimates and long-lagged revisions still play so much of a role at the BLS.
For one, you would think the Fed would want to see faster, more accurate employment info.
Because no one here knows anything about the surveys in the first place. 150 million employee at any given time and we are whining about an error of 150 thousand? That’s a literally 99.9% accurate all with a business response rate of sub 50% all while these businesses at any given time are hiring and firing easily a half a million every month. Since this is too hard to understand people are fine with trusting the new status quo: not being able to trust the BLS anymore cause they know people will get fired if they give bad news. This is what the USSR did and Turkey does so have fun with that.
You are so ignorant it hurts. Using internet surveys has long been known to be notoriously inaccurate because it’s hard to control for a) who answers and b) who doesn’t. In other words, it’s not a random sample. There are some internet based inflation measures, developed by economists who actually know statistics, and, surprise, surprise, they match the government figures closely and with no less error.
I’d just be careful of using revisions to substantiate that it meant BLS was doing a bad job and merited the firing. I used to think similar thoughts, and while I still have a lot to learn, things (like that) definitely were able to be spun far more nefariously when I wasn’t understanding correctly.
BSLS more exactly.
Why do you say waiting for clarity? Isn’t it just as possible they have, or think they have clarity, and have decided the prudent thing to do is cut back on expenses?
They’re NOT cutting back overall. They’re NOT laying off overall. They’re just “not adding much” to their work force.
Do you think that some of the federal employee job losses went into the private sector?
The article talks about job losses in the public sector like if those who were laid off are gone from the face of earth. Why is the private sector not absorbing the losses, wasn’t that the goal?
1. The private sector is absorbing them, but a job is a zero-sum game. If a laid-off government worker takes a private-sector job, another applicant does not get that job and remains unemployed.
2. Plenty of the people that left the federal workforce were old enough to retire with full benefits, and they retired and are gone from the labor force.
Government contractors laid off people when the contracts got canceled or paused, and companies whose government funds and grants were cut off laid off people. This would range from NPR radio stations and bio fuel startups to large government contractors, such as Booz Allen. Those are private sector jobs that vanished. But I cannot even guess what the number would be, whether it’s relatively small or large enough to make a dent.
I still am concerned that the current month’s data (August here) is based on models that can’t capture relatively fast changes in trends. For example,
“But the labor force surged by 436,000 in August to 170.8 million (working people and unemployed looking for a job), which played a big role in the increase of the unemployed”
Is the surge in labor force based on surveys (which have a relationship to reality) or on model assumptions, similar to what led to the Denominator Error during the previous administration?
The labor force is part of the household survey, which is pegged on Census Bureau population data, which has a very hard time tracking illegal immigrants, which was a huge problem in recent years. The Census Bureau finally, using multi-source administrative data from ICE and immigration courts, rather than surveys, came up with new population estimates last December which I reported on with this title:
Census Bureau Massively Revises Up Population Growth: +8 Million in 3 Years, +3.3 Million Last Year, Largely due to Immigration. US Population Surges to 340 Million
The BLS then adjusted its total employment, labor force, unemployment, and other data to this new population estimate in February, which caused total employment to be adjusted upward by 2.2 million for January, I reported on it with this title back in February:
Huge Upward Adjustment to Employment & Labor Force as Wave of Immigrants is Finally Included, Unemployment Drops, Wage Growth Accelerates: The Annual Revisions Are Here
So the household data, based on population data, is an iffy thing if the population data is so far off.
The next adjustment to the household data will come in February. Already looking forward to it.
People who said this sort of thing (golly, G estimates can be significantly off) in 2022 or 2023 came in for a lot o abuse and occasional censorship.
You came in for abuse because of your political conspiracy bullshit about the revisions.
The revisions turned out to make experts look abysmally incompetent.
Why are you afraid of rate cuts?
We will never seen 4.2% again and as AI becomes more powerful unemployment will continue to rise. It is a general purpose technology and comes with creative destruction and we’ve seen a number of jobs created due to AI coming online and it’s tremendous rise in popularity but we’re going to see a lot more jobs being lost in the future as companies figure out how to integrate it and replace the lowest hanging fruit.
There are millions of American jobs on the chopping block.
Just my 2c.
AI is now causing a hiring boom in data center construction, semiconductor plant construction, semiconductor equipment makers, utility projects, at tech companies, and in industries across corporate America, such as automakers, as they’re trying to deal with it and incorporate it and use it.
At the same time, AI is also destroying lots of jobs.
All new technologies do that — they create new jobs and destroy old jobs. So far, every major new technology has created more jobs than destroyed jobs; and every time, we heard these lamentations about employment going to hell. And it never panned out that way (though the people that lost their jobs may have trouble retraining for a new job, and it’s very tough for them generally, entire towns can be wiped out by big changes in technology, such as the shift from manual factory work to automation over the past 7 decades).
So now the question is whether AI will be the first major technology ever that will actually cause a net decline in employment. Lots of smart people are now arguing over it.
Ai isn’t going to cost us all our jobs.
Ai with robots, yes that will, unless people boycott it or vote to restrict it’s annihilation of most the workforce.
Either way the public will be voting to tax companies, the rich, and block this stuff, and vote for universal income.
Basically this will be the dawn of true communism …. Assuming the robots are that good, gonna be wild elections over all this
The net impact of AI still seems unknowable to me. AI and robots will presumably destroy many lower skilled jobs. But will the new jobs created to support the AI buildout be low skill.
For me personally, I’d live to see AI applied to replace Doctors and Lawyers. But in reality it will be tech-support, customer-service, drivers that sort of thing.
If/When the robotic thing really matures, who knows. But the new jobs created to service and manage robots and software services won’t be low skill. If robots can replace lower skilled manual labor tasks, robot service technicians wont be “low skill”
Most of the big tech “leaders” are talking UBI and UHI – it’s hard to know if that is simply cover or something they really expect to come about.
If it is a real direction the transition will be very, very difficult and the current constitutional order will mostly have to go or change so completely as to be something utterly new.
According to the experts, AGI arrives by 2027, and ASI will arrive no later than 2030.
Rapid advancements in robotics by 2030 will mean almost every job can be taken over by machines.
So it’s not a matter of IF. The question is how does mankind maintain control and if that is even possible once AI + Robotics + Quantum Computing merge.
So, yes, I think we can all agree AI + robotics has a near 100% potential to lead to net job decline. To suggest otherwise would be unimaginably naive.
An AI expert points out what pressure a future president will be under once ASI arrives. What do we do, knowing that China or other adversaries aren’t going to hold back?
Do we release ASI to take control to ensure we stay ahead, not knowing what lies ahead as the growing digital intelligence sees its role vs mankind.
AI isn’t losing jobs. It’s just an excuse. The AI bubble is not in a good spot as latest LLMs have shown to be pretty bad without more compute. There isn’t enough energy to power more compute AI bigger than ChatGPT without wind and solar that Trump cancelled
There are no AI companies making money. Those who are, are the ones who feed data to the LLMs or sell the hardware.
All studies show that LLMs don’t improve work at all and often make people slower.
AI does have it’s uses, but LLMs don’t seem to actually seem to work as promised. AI adoption has actually decreased recently.
LLMs are a huge risk on the economy. They go belly up, so does Tesla as Robotaxi’s become an even bigger joke. Datacenters which make up the majority of manufacturing will crater. Nvidia will crater, especially as Chinese competition offers a cheaper alternative. OpenAI and Anthropic crater and Microsoft and Meta take massive hit. Many other economists have marked LLMs as a bubble and a risk to econimic downturn.
You are not a technologists nor are you in anyway an expert on LLMs. Please stay in your lane.
Some good points and some clueless stuff. I do encourage you to read my articles, including this one:
https://wolfstreet.com/2024/11/10/we-might-not-get-our-recession-until-the-ai-spending-bubble-implodes/
They said the same things about the Internet in 1999, about computers in 1987, about home appliances and aircraft, about automobiles and farm machinery, about electricity, about railroads, heck even the printing press (it put all the monk scribes out of business…)
The truth is, technology which improves productivity is a great boon which frees up people to serve one another in new and better ways.
Every. Single. Time.
Yes, some jobs will be supplanted. But new things will appear. Wives don’t need to stay home and cook and clean, because appliances saved so much time. That’s not a bad thing! No one misses farriers or radio repairmen either.
But… people always over-hype the Next Big Thing, creating an investment fad, which leads to a market bubble and usually a crash.
“Manias, Panics and Crashes” is the title of the book to read. Or Devil Take the Hindmost.
BG – respectfully, you left out a most-important, honored-in-the-breach aspect of ‘homemaking’ (and I DON’T limit this to the distaff portion of the population), and that is an always-constant need for loving, supportive/supported, effective, hands-on child-rearing with an eye to their citizenship in the common future (…to rephrase the title of a popular ‘management’ book of years past: “What Color is Your Collateral Damage”…), something that has been, and still is, generally ignored by Capitalism’s short-term needs…
may we all find a better day.
Oh, Tillman Act 1907…giving ANY money, etc, to Fed officials for political purposes was a FELONY…think TR put that thru….
1982 SEC rules share buy backs are NOT market manipulation but a”good management technique”. FN Reagan.
All so your ghost up there can buy more shit and drive money to the top…..wonder if a bone spur would make good punji stake? Sounds like it….Smear it with orange make-up…and some thick hair gell….bit of hair glue…..get real fast jungle rot.
Money to Fed Office Candidates was Felony….sorry for usual dozens of posts but wanted to be accurate.
“Construction companies have complained about scared workers not showing up for work and not being able to find workers.”
Pay your help fairly and treat them fairly,you will be fine and always short of black plague have a good workforce…..,simple as.
I have been the worker and other times the boss of workers in construction,good help can be found and bad help can be let go.
Oh,take a little time to teach newbies skills,the way you learned to a large degree.
There are market forces at work there. Any big builder has shareholders demanding growth and higher ROI. They also are taking a hit with higher materials costs (even without tariffs). The other market force is buyers, you can only squeeze just so much margin there before nobody buys.
The only blank checks are being written for data centers.
Add retirements as a headwind: 41% of the construction workforce will retire by 2031 and we’re not creating anywhere near enough new workers to meet the demand.
Thank you for your wide look.
Correct. And we have alot of builds and plants similar to Hyundai that need a visit from ICE.
We also need to gut the temporary worker visas. The plant in my home town,
now Chinese owned. Half its staff from China. Work, eat, sleep in the plant. And the union and OSHA look the otherway.
Report them to ICE yourself. Homan won’t look the other way.
You are correct Mitch, and we do make the call.
Long overdue. Cheap illegal labor has been given lip service
for decades in the states and DC.
…the ‘murican market, in recent decades, despite decrying ‘cheap immigrant labor’ since the 1800’s, have been shown to still overwhelming shop the lower prices provided by the same, whether the labor is based here, or ‘free-traded’ anywhere else. Think this habit could explain, at least in part, the public’s apparent tune-out of thought/understanding/serious discussion of tariffs, and general rejection of any attendant pain arising from same (…some of those soundbite campaign promises, incredulously, are taken at face value and seem to linger) Will be interesting to see our native ingenuity in business ‘citizenship’ gaming/ignoring whatever old/new rules medium-long term to dodge domestic employment practice enforcement…
may we all find a better day.
You are daft
state and federal jobs losses at the same rate, subjectively state (and county and city) jobs are more important to the economy. that would include contractors as well. state (and city and county) government cannot run deficits, but (some) can privatize services and that could be a real drag on the economy.
To add to Wolf’s comment: total government employment has been steadily decreasing as a percentage of total employment for over 50 years straight: from 18-19% in the 70s to 14-15% today. The “hiring spree” in governments increased that share from an all-time low of 14.5% in 2022 to what still would have been an all-time low of 14.8% in 2024.
Define “all time”. Since 1776? 1976?
Since 1939. That’s how far the data goes back.
My apologies, Wolf. You are right the data goes to 1939, but the percentage of employees who worked for the government was slightly lower from 1939-1956, at about 13%.
So all-time low since 1957.
Stocks turn lower — and bond yields and dollar tumble — as job-market weakness jolts investors
Do you expect 50bps rate cut? I do not think it will happen and even if it does, debt issuance might surprise to upside leading to steepening. I still do feel we might have 0.2 pc lower 30y yield in next few months
It wasn’t bad enough for 50 and inflation will likely be plenty hot to make some question 25. We’ll see next week!
Jobs get any weaker and we’ll be much lower in the not too distant future
It sounds like an Office Space moment to me. Time to switch from that boring bureaucratic office job to sunshine and data center construction site.
Anecdotal, but I would say there has been an increase in hiring signs in my area over the past two months.
Oopsey, I meant to transfer savings into a 4.2% CD. I bet that ship has sailed.
That ship sailed before and then came back.
That final chart that goes back to 1975 shows a pretty bleak trend.
Every time unemployment hits a low point and then makes a substantial upswing, it is a doozy.
Even forgetting about the Covid spike (just eyeballing it) there seems to be a range of about a 2.5% to 5 1/2% increase in the unemployment rate every time.
That’s what recessions do. You can’t have a recession unless there is a substantial loss of nonfarm employment.
If history holds then, and if the correlation continues, looks like we’ve got a pretty significant recession coming…
People have said this day-in and day-out for three years, and there’s still no recession.
Eventually, we’ll get a recession. And you’ll see it happening when the unemployment rate starts spiking. you need to see a sharp decline in the labor market, not slow growth.
I haven’t said it.
I’m just noting that every time there’s this much of a change in the unemployment rate it just keeps going.
I doubt there is much consistency in the catalyst but, at least for this indicator, the results are always the same.
Maybe there’s an element of self fulfilling prophecy in play that gets tangled up in some of the factors that cause a recession…
Based on Wolf’s industry-by-industry breakdown, it sounds like a large chunk of recent job losses are due to government policies (cutting government jobs, immigration enforcement, tariff uncertainty, etc.), rather than about excessively-high interest rates squeezing the economy.
In which case, looser monetary policy wouldn’t resolve these issues but only increase inflation & fuel speculative bubbles across asset classes. The stock market hit a new intraday record this morning, then closed about 0.3% lower – it’s certainly not forecasting any remote chance of a recession.
Is the job market really that bad? It might be anecdotal evidence but I hear of people getting job offers all the time, including $1M+ contracts for mid-level machine learning engineers (the mainstream media has reported Big Tech firms signing superstars to 8, 9 & even 10-figure contracts.) On the blue-collar side, I’m constantly seeing turnover & new faces at my local restaurants & small businesses.
I was on the job market in 2008-09, so I remember what a bad economy looks like. Today’s job market seems fantastic even relative to the “good times” of 2017-19.
I wouldn’t put stock in what bigtech is gonna. They have a quasi monopoly now. As long as their customers pay the bills, they will dominate.
Statistically, my most recent job search was 3x longer than my average since graduating college.
Additionally, the number of people I know who are not employed is at a local high.
So my entire anecdotal experience lines up with the narrative of a weaker labor market.
I entered the job market in 2008, so I also know what bad times look like, and this is awfully familiar.
I don’t think this article is showing a bad job market. The job market is good. Just not quite as good as say 6 months ago.
I find the lack of construction and manufacturing job growth a bit surprising. Maybe some of it is base effect.
I discussed construction in the article. It’s not surprising: crackdown on illegal immigration.
You don’t have to be skilled to pick crops but construction is something else. You have to know what is going on and a lot of the undocumented have it in their blood, sweat and tears. Some start as kids going to work with their fathers before they migrate. Who wants to hire and train a kid off the street. It’s tough, hard work. Dirty, hot, cold, dangerous.
So slave labor it is!
@Eric86,
Slave labor it is, because construction companies prefer to be able to pay, or not pay, quickly hire and quickly fire, immigrant labor. Construction workers of the native bent always hated that lifestyle and went out and formed trade unions, which construction companies hated. Those aren’t coming back, so the native workers aren’t coming back in any big numbers.
…because companies prefer to pay, or not pay….
Will your company at least feed & shelter the slaves?
@kent, I know that. It isnt moral or right. There is zero reason to have labor laws or minimum wage laws if we are just going to hire illegals
The last BLS jobs report was revised very dramatically, perhaps incredibly. How can we have any confidence that today’s number won’t be revised (up or down) just as dramatically next month? I like that Wolf used a variety of measures of employment in a previous column and in this column, to try to see what is actually going on. Predictably, Wall Street just bounced off the headline BLS numbers today, which we have seen are now almost useless. I am somewhat surprised the bond traders have also jumped on the bullsh_t bandwagon. Let’s see what they do next week.
Sadly, Fed independence is being compromised by the Trump administration, not that the Fed was much good at its job anyway. So I would not be surprised to see a 50 bp cut next week, with Powell using some excellent economic mumbo jumbo to justify it. If the Fed goes on a cutting spree next week, I will be looking forward to a significant increase in inflation in 2026. Note that I have a lot of I-bonds and I like to buy T-bills, so I like high interest rates.
Stop spreading moronic conspiracy theories about faked data. The fastest way to faked data is to fire the people who collect because you don’t like the answer.
Revisions are normal. The BLS publishes the records on all revisions, including summaries. The long-term average (since 1979!) of all revisions is about 60,000 jobs, i.e. every single month since 1979 the average revision was 60,000 jobs. The average since January is about 80,000 jobs.
Stop spreading destructive innuendo.
The average monthly revisions for previous years are as follows:
2024: 48k jobs
2023: 51k jobs
2022: 28k jobs
2021: 181k jobs
2020: 130k jobs
How does this fit your conspiracy theory? The real answer is that there are bigger revisions in times when things are changing, like recessions or pandemic-caused recessions.
In March 2020, the revision was -672,000 jobs! Was that faked?
In November 2021, the revision was +437,000 jobs. Was that faked?
In September 2008, the revision was -244,000 jobs. Was that faked?
No conspiracy theory. The last revisions were almost universally considered ridiculous. All BLS jobs reports should be followed by a big P (pee), until BLS can give us confidence that these initial numbers are not just bullsh_t. If they are going to be revised so much, why bother publishing them. No big deal to wait another month to get some useful data. There are other measures of employment, like JOLTS, which do not suffer such bizarro revisions. Wolf has dug up some more useful numbers about employment.
The last revisions were only considered ridiculous by conspiracy mongers who were interested in promoting one political party.
As I said, the folks at BLS are experienced statisticians and have published the magnitude of their revisions (60k per month on average) and the confidence interval to estimate the sampling error (plus or minus 136k per month). Anyone who wants to know about these things can look them up instead of spreading lies.
numbers, you are suffering from a common misperception. You think nothing changes over time.
“The Bureau of Labor Statistics faces significant survey-related challenges that affect the accuracy and reliability of its monthly jobs report. A primary issue is declining survey response rates from businesses, which have dropped from 60% in January 2020 to under 43% in April 2025.
This decline means the initial jobs estimate—known as the “advance estimate”—is based on a smaller and potentially less representative sample, increasing reliance on statistical modeling to account for non-respondents.”
In other words, the initial jobs estimate is getting less and less reliable. As I said, why bother with it. Just wait one or preferably two months, when BLS can get a number that might better reflect reality.
BTW, I never said the data were “faked”. That is just you and your TDS. I said the initial data were bullsh_t, as in not worth much. In fact the initial data are getting worse as the survey response rates continue to decline.
That last part is true, but it’s not clear that it’s showing up in the data. Average revisions in 2022, 2023, and 2024 were not any larger than the historical average. March, May and June 2025 are showing larger than average errors, but there are two other potential explanations: 1. 3 months out of thousands could just be random, and 2. revisions are always higher at turning points, i.e. at the beginnings and ends of recessions.
Only time will tell.
JOLTS (also run by BLS) is not a measure of total employment. It doesn’t get revised (because there is no delayed data to add), but it does also have a much larger standard sampling error (plus or minus 3% of the total), than the jobs numbers have (plus or minus 0.1 percent).
I think we are going to see more layoffs in the news soon. Layoff city here in our little patch of corn country. Ag equipment and truck equipment markets are dead right now. We shed half our workforce April through August. More layoffs coming this month if things don’t turn around soon.
R g 62,
My weekly Monday email of Farm News from Grand Forks had this item four days ago which is in line with your comment:
“Titan Machinery 2Q Financials Released – In the second quarter, Titan Machinery reports revenue of $546.4 million, down from nearly $634 million one year ago. The West Fargo-based company suffered a $6 million loss during the quarter. Titan Machinery officials say they are on track with their inventory reduction strategy and are positioned to top the $100 million target for the full year.”
And another news item from Farm News four days ago:
“Fertilizer Plant to be Built in Illinois – Illinois Governor JB Pritzker announced Tuesday (August 26th) at the Farm Progress Show that Cronus Chemicals will invest over $2 billion to build a fertilizer plant in the state. The facility will produce 950,000 short tons of ammonia annually and employ 130 full-time workers. Illinois Agriculture Director Jerry Costello said the project comes at a critical time for farmers, who are facing high tariffs and unstable markets.”
Look at the Federal civilian hiring surge (compare slopes of graph line) starting in mid 2022.
For all the DC layoff hysteria circa Feb and March of this year, Trump has not even unwound the rapid Biden hiring of the last couple of years.
Trump may go further…but he hasn’t yet – so the MSM hair rending of Feb and March 2025 may have been…misleading.
And it really is unfortunate that we can’t figure out a way to at least ballpark Federal contractor numbers in something remotely like real time.
Years old academic papers estimated about 7 or 8 million Fed contractors (at a time when Fed civilian employees were at 2 million – so the Biden surge might have goosed Gvt contractor numbers to 9 or 10 million).
A couple of people on this blog (cough cough) have been saying that Gvt (all levels) employee hiring (and much more so – heavily government subsidized industry -*medical* – hiring) accounted for a large fraction of all hiring for 18-24 months…all the info is easily accessible at the BLS.
The “Biden surge” was 100k federal employees over a time period when the total number of employees increased by more than 3 million. How does that matter at all?
Since the end of 2022, we’ve added 1.2 million government employees, or about 40k/month, and 4 million non-government employees. This corresponds to about 20% of all new hires being government. Compared to 15% of all employees being government, this isn’t a big difference. So again, why does it matter?
Given Wolf’s explanations, is it fair to say that concern about the health of the labor market is not a reasonable justification for cutting rates with inflation not yet at or near, and not yet heading toward, the 2% goal?
We’ll get a clearer picture next Tuesday, when the non farm payrolls annual revision will be released. If payroll numbers will get revised down as dramatically as last time, the Fed will likely cut by 50 basis points. But, who knows, it might go also into the opposite direction.
Let’s take a step back and think about where we’ve all gotten in terms of viewing the health of the US macro-economy.
Oceans of ink and electrons are spilt speculating on interest rate movements – which alter real world, real asset, real effective production economics not one whit (utterly in the short term, arguably in the long term).
In fact, lusted after interest rate cuts are more a reflection of ongoing US productive failure than anything else.
For 25 years the G has been using artificially induced interest rate cuts (print money to gut rates) so as to paper over the utter ass-kicking China has delivered unto the US in terms of relative productive output/efficiency.
The next rate cut (series of rate cuts) are 90% sure to reflect the same thing.
When the US can produce a competitor to the $10K BYD Seagull (instead of a $35k ZIRP-financed SUV bloat box) then the US will be recovering – not when the Return of ZIRP sends Mag 7 PEs from 35 to 55 (historic norm – 15).
We are all paying attention to the wrong things and have been for decades.
“When the US can produce a competitor to the $10K BYD Seagull”
Americans refuse to buy those kinds of underpowered econoboxes. They want to in theory, but then they sit in it, and drive it around the block, and say forget it, and buy something nice that’s a few years old, costs the same, but comes with a reasonable amount of power (that thing has 74hp lol), is big enough, and has the bells and whistles American like.
The cars that Americans like to buy are also available in China and don’t cost much less in China than here. But for example, the Teslas sold in China have smaller motors and less power, and therefore can make do with smaller batteries, that’s where the savings are. But Americans don’t like that.
Your whole theory has already fallen apart.
Wolf,
“Americans refuse to buy those kinds of underpowered econoboxes”
Here you are ignoring how ZIRP has empowered/vastly distorted Americans’ purchase “preferences” (actually purchasing *power*).
If ZIRP hadn’t been employed multiple times since 2000, people would still be buying (and Ford/GM) would still be making *cars* at the $20k price point rather than more or less migrating entirely to the $35k SUVs-only price point.
Why?
Because ZIRP-less Americans could not *afford* the $35k price point (without the illusions/delusions of ZIRP).
ZIRP simply made everyone *seem* richer (with therefore richer “preferences”/temporary buying power – so $20k car “preferences” morphed into $35k SUV “preferences”) while the underlying macro-economic reality was absolutely different.
(I know SUV popularity started in the 1990s – but it did not prove fatal to US *car* lines until about 2016 or so)
You seem to recognize the delusions/destruction that ZIRP hath wrought in the housing market – why not the car/SUV market? – it is easily the same dynamic of wealth illusion/delusion.
We were trying to sell new $5,000 Ford Festiva’s in the early 1990s. We sold about 1-2 a month compared to 200 pickup trucks. We made next to no money on the $5,000 cars and we made maybe $2,000 per truck. Most Americans just hate these kinds of cars.
In addition, a car like the Seagul is a “city car” in China. I’m not sure if it’s highway legal in China. Japan has Kei cars, they’re tiny with 600cc engines or now electric motors. But they’re not highway legal in Japan either.
A general-use car in the US must be highway legal because highways are everywhere. And it must conform to all the safety requirements.
Markets started pricing in 50 BP cut now. 100% cut expected for Sep 2025.
Who knows? may be FED will cut 50BP. That’s what they did last year.
If we follow that 50, 25, 25 then again pause.
Powell just talks tough about inflation mandate. When time comes they give 1st preference to Labor now as inflation in range 3%.
Last 5 years we are fighting for inflation goal. Even though FED said they will let go their average inflation tracking approach, damage is already done.
Screw the savers and common Americans.
“Screw the savers and common Americans.”
Well, if the Fed is giving preference to labor, then it is just screw the savers while helping common Americans.
Common Americans in Worker age are already employed. See the Unemployment Rate. It is historical low range. What they are not able to bear is inflation. Continuous 5 years inflation is not good even when you are employed.
May be you are one those who just want cheap money so your assets prices keep sky high.
We should see another round of govt job losses in September as the first DOGE offer was accepted by a 100,000+. Florida is reporting lower public school enrollment which will impact funding and jobs locally.
Context is everything. When making comparisons, you got to work in proportion (%), not numbers. Exceeding a record set in 2020 may sound impressive but when you compare it in percentage terms, it’s a lot different. Specifically, the population is much larger now.
🤣 The unemployment RATE in the last chart is exactly that.
All you have to do is read the article.
Great article. I think the economy would be fine with a 5% unemployment rate, but people are just so unhappy with mortgage rates after being able to get 3%-4% mortgages a few years ago the Fed may as well cut rates.
I always find it interesting about the size of the labor force too. I wonder if the amount of people that have dropped out of the labor force has increased leading to lower unemployment rates, or if in fact the labor force participation rate has increased and more jobs are needed by the give and private sector to maintain the Fed’s end of year 4.5% projection.
Homebuyers aren’t unhappy with mortgages rates. They’re unhappy with home price affordability. They’d be just as happy for home prices to drop to reach affordability as they would be for rates to drop.
Home SELLERS are unhappy with mortgage rates, because they make it harder for these sellers to dump their mediocre houses for 3x what they paid in 2014.
Mortgage rates are close to the long-term norm. Existing homeowners who’ve seen values 3x in 20 years refuse to accept that their home values are overinflated. It’s not rocket science….if the generation that comes behind you has a lower standard of living and lower earnings power (adjusted for inflation), how TF can you expect prices to hold or rise? 🤯
The amount of government jobs created just since 2020 is breathtaking and mindboggling.
Read the other comments. If your breath is taken away by adding 800,000 jobs across all levels of government, you’ll really be amazed by the 7.5 million jobs added by the rest of the economy during that time period.
I’m a little tired of the hyperbole in the media and commenters.
The UE rate was 10% in 2010. It took 6 years for it to drop under 5.
A 4.3% rate with good labor force participation especially among 25-54 (or whatever the age range is) isn’t exactly a terrible economy. Are there some pain points? Sure, such as asset prices and I’d like to see more manufacturing jobs but that ship has probably sailed. But we should stop with the hyperbole everywhere. A 5% rate would be fine if asset prices and inflation come down with it.
A few numbers in the underlying report don’t look great. U6 which includes underemployed and specific population subgroups are concerning: canary in the coal mine. The headline 4.3% gets too much attention and I’d argue is not a leading indicator in any way.
U-6 is also historically low. There are not many periods before the pandemic when it was lower: a few months in 2006, and then for a couple of years during the dotcom bubble. And that was it. It’s now where it was during the tight labor market in 2018.
Look at a long-term chart of U-6
Wolf,
Looks like your excellent analysis of 13,000 jobs added last month was wasted. Seems they forgot the minus sign and the real figure is 13,000 jobs lost.
Every month you analyse the BLS figure and every time your previous month’s analysis gets washed away by revisions – why bother?
I give you the three-month average which includes all the revisions. It’s the big fat red line in the charts. If you don’t like data and serial revisions as more data become available, if you prefer cat videos, why bother coming here?
…sometimes it appears we’re all kittens, tangled, but still struggling, lion-hearted, in and against that multicolored ball of statistical yarn…
may we all find a better day.
That was REALLY REALLY REALLY GOOD, Dustoff……..wonder if both our writing styles here were formed by our MOS…..we were just pliable kittens in a different ball of yarn then, too, ya know?
May we all develop a better heart
It will be interesting to see, in the next few years, if companies will go back to doing what they did from the first half of the 20th century to the late 19th century, rather than sitting on their hands and expecting the command economy to bring them labor. For a LONG time employers drew people from around a state or even the nation with impressive compensation packages, including offering new services like pensions and health insurance, whenever there were shortages in their local labor force. There is nothing capitalist in government providing labor forces through training, college, and immigration.
Thats the easy part. The hard part is our public schools.
Tom – …we get what we pay for, much more than from mere money, but by the amount of dedicated, informed personal-time investment of parents in their kids. Would posit that there is a pretty straight slope of decline demonstrating a long-term, well-intentioned but usually-less-than-effective, attempts to offset a general erosion of parental time-investment (who may be also suffering the effects of the same long-term issues in their own education and ever-present demands of making a living, expecting schools to make up any attendant slack) with nothing but dollars…
may we all find a better day.
You are correct. Homeschooling was increasing in my area prior to covid. The lockdowns and remote learning accelerated it.
Costs of day care, being able to network with other parents committed to their child’s education, and being a family again
are big drivers.
Reminds me when old man was teaching me long division…….I kept objecting to him adding zeros…….said, “You are changing the number…..not fair”.
Oh! He was showing me financial stuff……
…would venture that business and corporations were more than happy to divest the ‘training, college, and immigration’ components of their ‘citizenship’ in favor of government/taxpayer responsibility and financing…
may we all find a better day.