Hiring loses momentum in US job market

?The US job market is bearing the brunt of President Donald Trump’s trade policies — and possibly AI. July’s jobs report indicates a recession, with key indicators including slowing hiring rates and rising unemployment among college graduates, according to Fortune.

Job growth falls short of forecasts: Predictions of 100k new jobs were blindsided by the reality of only 73k new jobs across the US in July. The decline follows May and June’s drastic cuts in job growth estimates, reaching a staggering combined drop of 258k jobs. CNN reports that these job gains are the weakest since December 2020, and this year’s job creation pace is so far the worst in decades.

Employers’ concerns over hiring are justified. Uncertainty in Trump’s trade policies and tariff rates is the reason why hiring is a risky undertaking at the moment. While immigration policies have not led to lay-offs, they could have played a role in decreasing demand for labor, especially for jobs dependent on migrant workers. Healthcare and social assistance were the main sectors contributing to job gains in July, whereas federal employment slumped with a loss of 12k jobs, according to the Guardian. To make matters worse, JPMorgan warns that “a slide in labor demand of this magnitude is a recession warning signal.”

Fresh college graduates are among the hardest hit by unemployment. Major decisions like hiring are being put on the back burner. Consequently, entry-level jobs are being increasingly replaced with AI, holding back careers for fresh graduates. Economist Brad DeLong, however, believes that AI is not the main culprit for youth unemployment. Resorting to AI for risk aversion seems to be a reactive adjustment to the bigger economic setbacks at play.

Fake news? Trump certainly thinks so. Just hours after the report was released, the US president fired Bureau of Labor Statistics commissioner Erika McEntarfer, who he accused of “faking” the numbers. “Today’s jobs numbers were rigged in order to make the Republicans, and me, look bad,” Trump said on Truth Social.