President Donald Trump’s decision to fire the commissioner responsible for producing the jobs report has overshadowed concerns about America’s job market, but economists haven’t forgotten. The latest data shows a slowdown in hiring over the past three months, leading to sharp revisions of May and June’s job totals by 258,000 jobs.
This revision has sparked alarm among economists, with many warning that it could be a sign of a recession. However, others note that the US economy has not officially entered a recession yet. The National Bureau of Economic Research tracks four key indicators of economic activity, but none have pointed to a recession or slowdown.
The recent moribund job growth was likely distorted by business uncertainty surrounding Trump’s tariffs, and it’s too early to tell if it will rebound or continue at this low level. Keith Lerner, co-chief investment officer at Truist, said the US economy is in a “muddle-through environment” that may require the Federal Reserve to take action to lower interest rates soon.
The Fed has known about slowing hiring for some time but was surprised by the sharp pullback over the past few months. Robert Ruggirello, chief investment officer at Brave Eagle Wealth Management, said while Friday’s jobs report is “terrible,” it shows companies freezing hiring until there is more policy certainty and business confidence.
The leading culprit behind slowing job growth may be Trump’s tariffs, which have businesses growing fearful that they could raise costs and hurt the economy. Chris Rupkey, chief economist at FwdBonds, said businesses are cutting back on new workers due to uncertainty about future policies.
While the jobs report has raised concerns, it’s essential to note that recent economic indicators point in different directions. The National Bureau of Economic Research tracks consumer spending, personal income, factory production, and employment, none of which have pointed to a recession or slowdown.
The revisions to May and June’s job totals were not fully unexpected but are still concerning. Goldman Sachs economists said the data confirm their view that the US economy is growing at a below-potential pace. Bank of America economists noted that some of the revisions were due to seasonal adjustments, which can be exacerbated by new data coming in.
As the BLS continues to collect payroll data and revise it accordingly, future revisions may be less dramatic than recent months. The job market’s slowdown is unlikely to have a significant impact on the economy until more policy certainty and business confidence are established.
Source: https://edition.cnn.com/2025/08/05/business/jobs-report-recession-warning-sign