Trump’s job market promises fall flat as hiring collapses, inflation up

The US job market has gone from healthy to lethargic during President Donald Trump’s first seven months back in the White House, as hiring has collapsed and inflation has started to climb once again as his tariffs take hold.

Friday’s jobs report showed employers added a mere 22,000 jobs in August, as the unemployment rate ticked up to 4.3%. Factories and construction firms shed workers. Revisions showed the economy lost 13,000 jobs in June, the first monthly losses since December 2020, during the COVID-19 pandemic.

The new data exposed the widening gap between the booming economy Trump promised and the more anemic reality of what he’s managed to deliver so far. The White House prides itself on operating at a breakneck speed, but it’s now asking the American people for patience, with Trump saying better job numbers might be a year away.

“We’re going to win like you’ve never seen,” Trump said Friday. “Wait until these factories start to open up that are being built all over the country, you’re going to see things happen in this country that nobody expects.” The plea for patience has done little to comfort Americans, as economic issues that had been a strength for Trump for a decade have evolved into a persistent weakness. Approval of Trump’s economic leadership hit 56% in early 2020 during his first term, but that figure was 38% in July of this year, according to polling by The Associated Press-NORC centre for Public Affairs Research.

The situation has left Trump searching for others to blame, while Democrats say the problem begins and ends with him.

Trump maintained Friday that the economy would be adding jobs if Federal Reserve Chair Jerome Powell had slashed benchmark interest rates, even though doing so to the degree that Trump wants could ignite higher inflation. Investors expect a rate cut by the Fed at its next meeting in September, although that’s partially because of weakening job numbers.

Senate Minority Leader Chuck Schumer, D-N.Y., said Trump’s tariffs and freewheeling policies were breaking the economy and the jobs report proved it.

“This is a blaring red light warning to the entire country that Donald Trump is squeezing the life out of our economy,” Schumer said.

By many measures, Trump has dug himself into a hole on the economy as its performance has yet to come anywhere close to his hype.

- Trump in 2024 suggested that deporting immigrants in the country illegally would protect “Black jobs.” But the Black unemployment rate has climbed to 7.5%, the highest since October 2021, as the Trump administration has engaged in aggressive crackdowns on immigration.

 At his April tariffs announcement, Trump said, “Jobs and factories will come roaring back into our country and you see it happening already.” Since April, manufacturers have cut 42,000 jobs and builders have downsized by 8,000.

Trump said in his inaugural address that the “liquid gold” of oil would make the nation wealthy as he pivoted the economy to fossil fuels. But the logging and mining sectors - which includes oil and natural gas - have shed 12,000 jobs since January. While gasoline prices are lower, the Energy Information Administration in August estimated that crude oil production, the source of the wealth promised by Trump, would fall next year by an average of 100,000 barrels a day.

- At 2024 rallies, Trump promised to “end” inflation on “day one” and halve electricity prices within 12 months. Consumer prices have climbed from a 2.3% annual increase in April to 2.7% in July. Electricity costs are up 4.6% so far this year.

The Trump White House maintains that the economy is on the cusp of breakout growth, with its new import taxes poised to raise hundreds of billions of dollars annually if they can withstand court challenges.

At a Thursday night dinner with executives and founders from companies including Apple, Google, Microsoft, OpenAI and Meta, Trump said the facilities being built to develop artificial intelligence would deliver “jobs numbers like our country has never seen before” at some point “a year from now.” But Michael Strain, director of economic policy studies at the American Enterprise Institute, noted that Trump’s promise that strong job growth is ahead contradicts his unsubstantiated claims that recent jobs data was faked to embarrass him. That accusation prompted him to fire the head of the Bureau of labour Statistics last month after the massive downward revisions in the July jobs report.

Strain said it’s rational for the administration to say better times are coming, but doing so seems to undermine Trump’s allegations that the numbers are rigged.

“The president clearly stated that the data were not trustworthy and that the weakness in the data was the product of anti-Trump manipulation,” Strain said. “And if that’s true, what are we being patient about?” The White House maintained that Friday’s jobs report was an outlier in an otherwise good economy.

Kevin Hassett, director of the White House National Economic Council, said the Atlanta Federal Reserve is expecting annualized growth of 3% this quarter, which he said would be more consistent with monthly job gains of 100,000. Hassett said inflation is low, income growth is “solid” and new investments in assets such as buildings and equipment will ultimately boost hiring.

Associated Press