The U.S. job market just hit a major wall — and the impact is starting to ripple through the economy. New government data shows a steep slowdown in hiring, driven by a combination of rising tariffs, a shrinking labor pool, and the aftershock of mass retirements.
Employers barely added new jobs in July, and what’s more alarming is that previous months’ job gains were quietly wiped away. The June employment numbers were slashed drastically, revealing the labor market has been far weaker than it appeared.
Unemployment ticked up to 4.2%, another sign that the economy is losing steam.
The slowdown is rooted in some big structural problems:
-Trump’s latest wave of hefty tariffs on goods from dozens of countries is raising business costs and triggering uncertainty
-The retirement of millions of baby boomers is rapidly thinning out the workforce
-Tougher immigration policies have slowed the flow of new workers, making it harder for businesses to fill open positions
With fewer people looking for jobs and more leaving the workforce, economists say the U.S. no longer needs 200,000+ jobs a month just to keep pace. But even the lower benchmarks aren’t being met anymore.
Federal Reserve Chair Jerome Powell is keeping interest rates steady for now, but the central bank’s next move is uncertain. Inflation is climbing due to tariffs, and the job market’s weakness complicates any talk of rate cuts.
Markets reacted fast — stocks dropped, bond yields sank, and recession talk picked up again.
This latest report puts the Fed, the White House, and Wall Street all on notice: the job market might not be as stable as they thought.
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