As the summer dies down, the realities of the current national economy are becoming clearer, with reductions in hiring, increases in layoffs and warnings that a downturn may be around the corner.
ADP’s private payroll report for August came in well under forecasts, with predictions of 75,000 new jobs in the month met with final totals of just 54,000. MarketWatch reported that the news extended a “string of poor employment reports,” with ADP chief economist Nela Richardson saying early momentum this year was “whipsawed by uncertainty.”
The ADP report often comes out shortly before the official U.S. jobs report, expected on Sept. 5, but increased scrutiny of that report is likely after President Donald Trump fired the Bureau of Labor Statistics’ commissioner in August, The Hill reported. That firing came after the BLS labor report for July saw a reduction of nearly 250,000 jobs previously expected in the economy in spring and summer months and an average of just 35,000 new jobs per month from May to July.
Trump has since nominated a replacement who suggested ending the monthly jobs report, raising questions about the accuracy of future reports.
Initial projections for August’s BLS report, analysts told The Hill, are expected to be low, with predictions ranging from 40,000 to 75,000 added jobs, much lower than in previous months and yearly averages. The real numbers were even worse. According to the BLS report released Friday, nonfarm payroll jobs came in at just 22,000 and the unemployment rate reached 4.3%, its highest level since the fall of 2021.
Adding to concerns, the Job Openings and Labor Turnover Survey showed more job seekers than open jobs in the country for the first time in more than four years, with 7.24 million job seekers compared to 7.18 million job openings – the first time that metric has been negative since April 2021 and the end of the pandemic.
The Hill noted another report set for release on Sept. 9, which aligns survey estimates to population totals, could see job growth from April 2024 to March 2025 revised down by as many as 900,000 jobs, with discussions of the Federal Reserve possibly needing to cut interest rates to avert rapid degradation of market conditions if those predictions hold.
Layoffs are also nearing highs last seen during the pandemic. Challenger, Gray and Christmas reported on Sept. 4 that August job cuts rose by 39% month-over-month to nearly 86,000 in August and up 13% year-over-year. In fact, August layoffs were the highest seen since August 2020, and prior to the pandemic, the highest since 2008, the start of the Great Recession. Challenger reported that employers’ job additions compared to layoffs reported saw private job growth of just 1,494 in August, described as a “troubling sign” as autumn and the holiday season near.
The report noted that retailers are getting hit financially by tariffs, inflation and economic uncertainty, which could lead to lower than average seasonal hiring around the holidays and possibly even significant layoffs. Elon Musk’s DOGE is responsible for nearly 300,000 layoffs this year, followed by 200,000 blamed on market and economic conditions. As many as 30,000 layoffs in 2025 so far may be due to AI and automation, the report said.
