Folks, I almost spilled my coffee reading this one. The August jobs report is due out at 8:30 a.m. ET Friday, and economists are expecting that employers added 65,000 jobs last month and the unemployment rate inched back up to 4.2%. Now, I know what you’re thinking, “Big Elephant, that’s not exactly a booming jobs market.” And you’re right, it’s not. But, as the saying goes, “it’s not all bad news.” US employment is likely to rebound after the surprise in July, when the economy unexpectedly lost an estimated 23,000 jobs, and the jobless rate dropped to 4.1% as people exited the labor market.
Looking through the monthly swings, and there’s been a fair share of them recently, the underlying story is expected to stay the same: it remains a “low-hire, low-fire” labor market. You know, one of those “it’s not great, but it’s not terrible either” kind of situations. The stasis and the tepid job growth may not show it, but this labor market is in the throes of a major transformation as Baby Boomers retire, net immigration slows, and exogenous shocks ripple through the economy.
Last year’s job growth was one of the weakest on record, and fresh data shows that employment growth was likely even more listless than previously thought. The US economy added 79,000 fewer jobs than initially estimated between April 2025 and March 2026, the BLS reported last week. If these estimates hold, it will shrink job growth during that period to 194,000 from 273,000, or roughly 16,000 jobs per month versus nearly 23,000 jobs per month.
So far this year, job growth is running at a monthly average of just under 61,000 jobs per month. That’s about half of what the economy previously averaged in 2024 or in the 80 years before the pandemic. Hiring has been stifled in part by high uncertainty, high interest rates, high inflation, and volatile policy shifts and geopolitical developments. As Noah Yosif, chief economist at the American Staffing Association, told CNN, “These drivers that are underlying employers’ hesitance to hire – both inflation as well as uncertainty – they are going to take a long time to ease.”
The economy also doesn’t need to add as many jobs as it once did, thanks to lower labor supply due to things like lower immigration, lower birth rates, and increased retirement. But, as Yosif noted, “We’re continuing to see lower labor supply due to things like lower immigration, lower birth rates, increased retirement – and so that’s going to keep the labor market broadly in balance.” July’s estimated job losses were surprising, but they shouldn’t be cause for alarm, several economists noted in their commentary this week.
The labor market seemingly is on solid footing, unemployment is low, job cut announcements are running 40% below this time last year, and wage growth isn’t considered to be a source of inflation. However, it’s a labor market that’s doing just fine for the economy but doesn’t feel great for many workers or job seekers, Yosif said. “For the better part of three years, 94% of jobs have been created within just three sectors: healthcare, leisure and hospitality, and (state and local) government,” Yosif said. “So, while folks like (Federal Reserve Chairman) Kevin Warsh say that the labor market is broadly in balance, that really doesn’t connect with the options available to many job seekers today.”
The BLS’ latest labor turnover data showed that hiring activity remained muted despite an uptick in job postings, an indication that employers remain cautious. And, separate data released Thursday shows that the “low-fire” descriptor is holding firm. More US businesses announced job cuts last month than they did in July, but at 52,881, that’s the lowest August total since 2022. Jobless claims continue to remain at low levels: They were at 206,000 last week, Labor Department data shows.
Healthcare is expected to continue to drive August’s job gains, and that was indeed the case in ADP’s latest monthly private-sector employment report released Wednesday. The payroll giant noted that education and health services added 45,000 jobs last month, offsetting losses in other sectors to leave a net gain of 38,000 jobs. Overall base pay slowed to 3.2%, it held at 3% for job-stayers and cooled to 4.7% for job-changers.
As Nela Richardson, ADP’s chief economist, said, “There is a cost to a low-hire, low-fire labor market, because one of the ways that workers outrun too-high inflation is by switching jobs.” If the premium for the opportunity to job-switch isn’t present, it’s going to be harder for workers overall to keep up with higher inflation. So, to sum it all up, the jobs market is a mixed bag – not great, not terrible. And, as I always say, “you can’t have your cake and eat it too,” but in this case, it seems like we’re just getting a slice of the cake, and it’s not even a very big slice. Bless their hearts, economists and their predictions – it’s always a wild ride! 🥐
Armchair patriot. Believes in the free market, cold beer, and that there’s always a guy named George behind every CNN segment.
Former remote-throwing champion turned #1 couch commentator on liberal panic in the media. Born in Texas (or so his mug says), he earned a degree in Fake Newsology & Beer Philosophy from YouTube University.
