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Tag: Labor Markets

  • US economy added 50,000 jobs in December, capping off one of the weakest years of job gains in decades

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    (CNN) — Hiring slowed more than expected in December, a sluggish end to what was one of the weakest years of job growth in decades, a dynamic that further amplified America’s affordability crisis.

    The US economy added an estimated 50,000 jobs last month, slowing from a downwardly revised 56,000 jobs added in November, according to Bureau of Labor Statistics data released Friday.

    Still, the unemployment rate edged lower to 4.4% from a revised 4.5% in November.

    Economists were expecting a net gain of 55,000 jobs in December and an unemployment rate of 4.5%, according to FactSet consensus estimates.

    With December’s estimated job gains, which are subject to revision, the US economy added just 584,000 jobs last year. Outside of recession years, that’s the weakest annual job growth seen since 2003, BLS data shows.

    And those meager gains were driven almost entirely by a couple of industries.

    “The United States is in a jobless boom,” Heather Long, chief economist at Navy Federal Credit Union, said in an interview with CNN. “There was almost no hiring in 2025 … we would be talking about job losses in 2025, if it weren’t for health care and social assistance.”

    Unemployment becoming a ‘permanent state’

    In addition to the tepid gains recorded for December, October and November’s payroll estimates were revised lower by a combined 76,000 jobs.

    Even still, the meager pace of employment growth is actually even weaker than the December report shows – something that will become clearer in the January jobs report.

    That’s when the BLS will release the results of its annual benchmarking process that squares up the more real-time survey-drawn monthly estimates with the heavily lagged (but more accurate) payroll figures from employers’ quarterly tax filings. The preliminary estimate, released in August, was that 911,000 fewer jobs were likely added for the year ended in March 2025.

    “With these revisions, the story of payroll employment in 2025 will convert, ex post facto, from ‘snail-like growth’ to ‘recessionary-like conditions,’” Brian Bethune, a financial economist and professor at Boston College, wrote in commentary on Friday.

    This low-hire, low-fire labor market has resulted in more people on the outside looking in. In December, the share of people who were unemployed for 27 weeks or more rose to 26%.

    That indicates “unemployment is increasingly becoming a permanent state rather than a temporary transition,” Nicole Bachaud, ZipRecruiter’s labor economist, wrote in a note on Friday.

    Still, Friday’s report did have a couple of bright spots, which included stronger-than-expected wage gains. Average hourly earnings rose 0.3% for the month and picked up to 3.8% for the year – a modest gain over inflation.

    A deep hiring chill since April

    The labor market was already slowing, heading into 2025, as it continued to normalize following the seismic economic impacts of the Covid-19 pandemic.

    However, the gradual cooling turned sharply into a freeze by the spring. About 85% of the year’s job gains occurred in the first four months of the year, Long noted.

    In April, President Donald Trump made his “Liberation Day” announcement of a massive suite of broad and steep tariffs on many of the goods imported into the country.

    That and other dramatic policy shifts sent uncertainty surging higher and tossed an ice bath on sentiment in the process.

    Tariffs, and the uncertainty surrounding them, were one of three big factors that contributed to the “hiring recession” that engulfed pretty much all industries last year, Long said in an interview with CNN.

    In addition to tariffs, jobs continued to be scaled back in industries that over-hired during the pandemic. Additionally, the rise of artificial intelligence played a role as well, she said.

    “What happened with AI is firms needed to use their cash to invest in AI, and so they pulled back on hiring in order to free up that cash,” she said. “It wasn’t so much like, ‘I’m going to use the robot to replace the human.’ It was, ‘I need the dollars to go to tech investment instead of human investment.’”

    What resulted were muted employment gains – or even outright losses –across most industries.

    The lone exceptions were health care – an industry growing as a result of an aging population – and leisure and hospitality, which has reaped some of the spoils from an increasingly bifurcated economy, where well-heeled Americans see continued wealth gains while a larger share of middle- and lower-income households are experiencing increased strain.

    That was again indeed the case in December.

    Leisure and hospitality businesses saw net job gains of 47,000, while health care and social assistance added 38,500 jobs, BLS data showed. Jobs were shed across goods-producing businesses, particularly those in manufacturing, as well as retail trade (where seasonal hiring wasn’t as flush as in years past)

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    Alicia Wallace and CNN

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  • The US economy added 119,000 jobs in September, but unemployment rose to a nearly four-year high

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    (CNN) — A long-awaited jobs report offered a mixed picture of the US labor market.

    The economy added 119,000 jobs in September, an unexpected rebound for the labor market — but it comes as the overall economy shows signs of slowing.

    Economists were expecting 50,000 jobs to have been added and an unemployment rate that remained at 4.3%, according to FactSet.

    Delayed for seven weeks due to the government shutdown, the latest snapshot of America’s job market showed that unemployment rose in September to the highest level in nearly four years.

    In addition, August’s tepid job gains of 22,000 were revised to a job loss of 4,000 jobs and July was revised down by 7,000 jobs, according to Bureau of Labor Statistics data released Thursday.

    The health care and social assistance sector continued to drive overall employment growth. Those sectors added an estimated 57,100 jobs in September, accounting for nearly half of the overall gains. Leisure and hospitality contributed 47,000 jobs during a month with unseasonably warm weather.

    Jobs were lost in sectors such as transportation and warehousing (-25,300), temporary help services (-15,900) and manufacturing (-6,000).

    Although the September employment data has been on the shelf since early October, it provides a critical snapshot of the labor market at a time when tariffs, stubborn inflation and elevated interest rates continue to slow the US economy.

    Summer of job losses

    Plus, Thursday’s report might very well be the last clean jobs report for a couple of months, since the shutdown mucked up the finely tuned process of data collection and analysis during October and part of November. The BLS on Wednesday announced that there will not be a separate October jobs report published but instead some of that data will be included in the November report scheduled for December 16.

    Despite the stronger-than-expected September gains, this year is still on pace for the weakest employment growth since the pandemic and, before that, the Great Financial Crisis.

    “The job market was really weak in the summer, and it didn’t improve much in September,” said Heather Long, chief economist at Navy Credit Union. “What we learned today is that both June and August had negative job growth, so, shedding jobs; 119,000 is pretty good for September, but when you step back, the average (monthly job gain) of the past four months is in the low 40,000s.”

    “So, it looks very weak,” she added.

    Unemployment, a closely watched recession indicator, ticked higher in September, rising to the highest rate since October 2021.

    However, driving the jobless rate higher was an increase in the labor force – primarily an uplift in more people looking for work, versus a sharp increase in layoffs, BLS data shows.

    Low-fire, low-hire, low-opportunity market

    The job gains remain heavily concentrated. Two sectors – health care and social assistance, and leisure and hospitality – accounted for 87% of September’s job growth.

    But in a labor market that’s been in a low-hire, low-fire slog, there are also few opportunities for those seeking work. On average, it’s taking people six months to find work, according to the latest BLS data.

    The latest unemployment claims data supports that trend: In a separate report on Thursday, the Labor Department reported that an estimated 1.974 million people filed continuing claims for unemployment insurance for the week ended November 8, hitting a fresh four-year high.

    Initial claims, which are considered the best proxy for layoff activity, fell to 220,000 last week, remaining well below more concerning thresholds (300,000 to 400,000 range, consistently).

    “If I had to characterize it, it still looks a lot like ‘no-hire, no-fire,’” Long said. “I do worry, given the number of industries that are starting to fire, that this is starting to look like ‘no-hire, start-to-fire.’”

    ‘Cold water’ for a Fed cut

    Despite the mixed bag of data, the September report “could throw cold water” on the Federal Reserve cutting interest rates further when it meets in December, Kathy Bostjancic, chief economist at Nationwide, wrote in a note on Thursday.

    “The sharp rebound in employment gains, up 119,000 in September following the downwardly revised negative 4,000 print in August soothes concerns that the labor market was on the precipice of a large downturn and removes urgency for another rate cut,” she wrote.

    Still, because of the historic government shutdown, the September jobs report will be the freshest official monthly employment snapshot available when the Fed makes its next interest rate decision on December 10. The partial October and full November data won’t come out until the following week.

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    Alicia Wallace and CNN

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  • Job growth stalls: US economy added just 22,000 jobs in August and unemployment rose to highest level since 2021

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    (CNN) — The US job market is stalling out.

    Job growth slowed to a crawl in August, and the unemployment rate rose to its highest level in nearly four years, indicating the US labor market is growing stagnant.

    The economy added just 22,000 jobs last month and the unemployment rate rose to 4.3% from 4.2%, according to the Bureau of Labor Statistics.

    August’s job report also included a downward revision to June, which showed the US economy lost 13,000 jobs that month. It’s the first negative employment month since December 2020, and it brings to an end what was the second-longest period of employment expansion on record.

    “The Great American jobs machine has stalled,” Christopher Rupkey, chief economist at FwdBonds, wrote in commentary issued Friday.

    July’s job gains were revised up slightly to 79,000 from 73,000, according to the report.

    Economists were expecting that the economy added 76,500 jobs last month and that the unemployment rate rose to 4.3%, according to FactSet.

    The Dow rose 119 points, or 0.26%, Friday morning. The S&P 500 rose 0.41% and the tech-heavy Nasdaq gained 0.63%, after the weaker-than-expected jobs data boosted expectations that the Federal Reserve will cut interest rates in September to stimulate the economy.

    Uncertainty stymies hiring

    Through August, monthly job gains average 74,750, BLS data shows. Excluding the pandemic, that’s the slowest average monthly gain for that January to August time frame since 2010, when the United States was still licking its wounds from the Great Recession.

    “The addition of just 22,000 jobs in August, along with net downward revisions of previous months, shows an economy straining under the immense economic uncertainty and significant policy changes of 2025,” Laura Ullrich, Indeed’s director of economic research for North America, wrote Friday.

    Uncertainty has swelled since the beginning of the year in large part around how President Donald Trump’s sweeping policies on tariffs, immigration and federal spending would shake out through the economy.

    Hiring efforts, already stymied in part by still-high interest rates, have been largely shelved due to the unknowns.

    “They don’t know where things are going, whether it’s through tariffs or other dynamics – interest rates still aren’t coming down – so I think a lot of companies are just saying, ‘not now,’” Ron Hetrick, senior labor economist at employment analytics company Lightcast, told CNN in an interview. “I think there’s somebody probably out there who’d like to hire, but not in this environment.”

    “They’re waiting for more certainty to occur,” he said.

    Narrow job growth means fewer opportunities

    The low-hire, low-fire environment is leaving workers and job hunters with few opportunities.

    And more workers are seeking those opportunities, as labor market re-entrants helped to lift the unemployment rate last month.

    The labor force, which shrank for three months in a row, increased by 436,000 people in August, according to BLS data. The labor force participation rate moved higher as well, ticking up to 62.3% from 62.2%.

    While the majority of those labor force gains were from those classified as employed, the increase in those unemployed was largely attributed to those who re-entered the labor market and are searching for jobs.

    “In fact, the median time looking for work slipped to a three-month low, a bright spot in a generally weak jobs report,” Jennifer Timmerman, senior investment strategy analyst at Wells Fargo Investment Institute, wrote in a note to investors Friday.

    A low-churn labor market puts the US labor market — and the broader economy — at greater risk, economists warn.

    The limited job gains also are coming from practically a single source, exacerbating those concerns.

    The US job market is being propped up primarily by ongoing employment gains in the health care industry. That sector, which has attributed for the lion’s share of overall job growth this year, added 46,800 jobs in August.

    That sector, however, accounts for just 15% of total employment, meaning many people are left on the sidelines.

    “For 85% of workers, they’re not seeing a lot of the jobs added,” Kory Kantenga, LinkedIn’s head of economics Americas, told CNN this week.

    And wage gains are increasingly growing softer. The annual growth rate of average hourly earnings slowed to 3.7% in August, from 3.9% in July.

    Without broader-based employment growth, the labor market is more vulnerable to shocks, he said.

    “If anything happens to that industry, you could easily see job growth fall off a cliff.”

    Warning signs have been flashing for months that the job market has been losing steam. That became starkly clearer in July, when weak job growth and larger-than-typical downward revisions spurred the unprecedented firing of BLS Commissioner Erika McEntarfer by President Donald Trump who claimed, without evidence, that the disappointing data must have been “rigged.”

    Other labor market data released so far this week further confirmed that the labor market has cooled down considerably: Private-sector hiring slowed sharply; initial jobless claims hit a nearly three-month high; layoff announcements picked up; and, for the first time in four years, the number of available jobs was lower than the number of job seekers.

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    Alicia Wallace and CNN

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