The U.S. labor market has shifted from a positive trend to a slowdown during the first seven months of Donald Trump’s presidency, as employment declined and inflation began to rise again amid the fallout from his trade policies.
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A jobs report released Friday showed that only 22,000 new jobs were added in August, while the unemployment rate rose to 4.3 percent. Factories and construction companies saw reductions in their workforce.
Revised data also indicated a loss of 13,000 jobs in June, marking the first monthly decline since December 2020, during the COVID-19 pandemic.
These figures reveal a widening gap between the “thriving economy” Trump promised and the reality, according to the Associated Press.
The White House touts the speed of its accomplishments but is now asking Americans for patience. Trump stated that improvements in job numbers might take a year, saying Friday: “We will achieve unprecedented success. Wait until new factories start operating—you will see unexpected developments.”
However, this call for patience has had little effect on public opinion, as economic issues—once a Trump strength—have become a persistent weakness. Approval of Trump’s economic leadership fell from 56 percent at the start of 2020 to 38 percent in July, according to an Associated Press-NORC Center poll.
Trump Blames Others
In response to the situation, Trump has blamed others, while Democrats argue the problems stem from his policies. On Friday, Trump claimed the economy could have added jobs if Federal Reserve Chairman Jerome Powell had cut interest rates, although cutting them to Trump’s desired level could increase inflation.
Investors anticipate a rate cut by the Federal Reserve in its upcoming September 16–17 meeting, partly due to weak job numbers.
Senate Minority Leader Chuck Schumer said Trump’s trade policies are harming the economy, as evidenced by the jobs report. “This is a stark warning to the entire country that Donald Trump is damaging the U.S. economy,” he said.
Economic Dilemma
Trump finds himself in an economic bind, as performance has not met the expectations he promised:
In 2024, Trump claimed that deporting illegal immigrants would protect “Black jobs,” yet unemployment among Black Americans rose to 7.5 percent, the highest since October 2021, following aggressive immigration crackdowns.
Regarding tariffs in April, Trump said, “Jobs and companies will return to our country with strength.” Since then, manufacturing companies cut 42,000 jobs, and construction companies reduced 8,000 positions.
Trump claimed that fossil fuels, or “black gold,” would make the country wealthy. Yet the oil and gas sectors lost 12,000 jobs since January. Despite falling gasoline prices, the Energy Information Administration estimated in August that crude oil production, which Trump promised to exploit, would decline by 100,000 barrels per day next year.
During his 2024 campaign, Trump promised to “end” inflation on day one and cut electricity prices by half within 12 months. Consumer prices rose from 2.3 percent in April to 2.7 percent in July, while electricity costs increased 4.6 percent so far this year.
White House: Major Growth Is Near
The White House insists the economy is on the verge of significant growth and that new tariffs could generate hundreds of billions of dollars annually if legal challenges are overcome.
At a dinner with executives from Apple, Google, Microsoft, OpenAI, and Meta, Trump stated that AI development centers would create “record numbers of jobs” over the next year.
However, Michael Strain, Director of Economic Studies at the American Enterprise Institute, noted that Trump’s promises of strong job growth conflict with his unreliable claims that recent job data are “rigged.” This accusation led him to fire the head of the Bureau of Labor Statistics last month following large downward revisions in July’s report.
Strain said it makes sense for the administration to talk about future improvement, but such statements undermine Trump’s claims of data manipulation. “The president has clearly asserted that the data are unreliable and weakened by systemic bias against him. If this were true, why should we exercise patience?”
“Exceptional Data”
The White House insisted that Friday’s jobs numbers were an exception in an otherwise healthy economy. Kevin Hassett, Director of the National Economic Council, said the Atlanta Fed expects 3 percent annual growth this quarter, consistent with adding roughly 100,000 jobs per month. He noted low inflation, steady income growth, and new investments in assets like buildings and equipment would eventually boost employment.
However, Daniel Hornung, Deputy Director of the National Economic Council under Biden, said he found no evidence of a forthcoming rebound in August’s job data. He highlighted weaknesses in goods-producing sectors such as construction and manufacturing over the past three months and noted that tariffs may exacerbate these challenges.
Stephen Moore, a conservative economist at the Heritage Foundation and Trump supporter, said the labor market is “weak,” endorsing Trump’s claims of unreliable job data. He added that the economy is adjusting to Trump’s policies on tariffs and immigration, potentially reducing the available workforce. Moore noted, “The next problem is labor shortages, not job shortages, which in some ways can be a positive issue.”
Frank Luntz, political consultant and pollster, said that job numbers will not determine Trump’s political fate, as voters are more concerned with inflation and the cost of living. Regarding elections, Luntz noted that Trump has a year to prove economic improvement, with voters likely forming opinions on the economy by Labor Day before next year’s midterms. “In short, Trump still has time,” he said. “The situation remains unclear, and the final outcome will be evident by Labor Day 2026.”
— (Agencies)
