The labor market just hit a wall. Here’s what experts say it means for the economy and your job.

Authors: Aimee Picchi

Publisher:

CBS News

Published: 8/4/2025

Language:English

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Aura Windfall

Good morning norristong_x, I'm Aura Windfall, and this is Goose Pod for you. Today is Thursday, August 07th. What I know for sure is that today's conversation is one that touches the very core of our economic spirit and our sense of security.

Mask

I'm Mask. We're here to discuss the labor market hitting a wall. Forget security, Aura. Disruption is the game. The economy isn't a gentle stream; it's a raging river, and you either build a dam or get swept away. Today, we talk about the dam.

Aura Windfall

Let's get started. The truth is, last Friday's jobs report sent a wave of unease through many. It wasn't just that hiring slowed down in July; it's that the numbers for May and June were revised so sharply downward. It felt like finding a crack in the foundation.

Mask

A crack? It's a demolition. The previous numbers were a fantasy. We're now told the U.S. added a "paltry" 19,000 jobs in May and 14,000 in June. That’s not a wobble; it's a full-on stall. We needed a reality check, and we got one, written in red ink.

Aura Windfall

And that reality check has real human consequences. The report says the number of people searching for a job for more than 27 weeks jumped 11%. These aren't just statistics; these are stories of perseverance being tested, of hope stretching thin across kitchen tables.

Mask

Hope doesn't build factories. Look, the core of the issue is that businesses are spooked by uncertainty. The Federal Reserve's own report confirms it. Companies are delaying hiring. They're waiting. This stasis is the enemy. You can't win by waiting. You win by making bold moves.

Aura Windfall

But the response to this has created even more uncertainty, hasn't it? President Trump fired the Bureau of Labor Statistics Commissioner, claiming the data was manipulated. It raises a fundamental question of trust. How can we find our purpose if we can't believe the map?

Mask

You're missing the point. The map was wrong! National Economic Council director Kevin Hassett said the revisions were "five times bigger than the number itself." If your data is that flawed, you don't question the leader, you fire the mapmaker. You need a new architect, someone who can handle the complexity.

Aura Windfall

But even his own party members, like Senator Lummis, called the firing 'impetuous.' She said it's not the statistician's fault if the numbers are accurate but not what was hoped for. This speaks to a crisis of faith in our institutions, which is a spiritual wound on the economy.

Mask

Institutions that fail to deliver results deserve to have their foundations shaken. The BLS needs fresh eyes. It's not about politics; it's about performance. The old system is producing "noisy" data that markets can't trust. In a high-stakes game, you can't play with a broken compass. You build a new one.

Aura Windfall

A former BLS Commissioner, William Beach, said it's impossible to rig the data. He believes this move undermines the very credibility the markets need. It feels less like building a new compass and more like smashing the old one, leaving everyone to navigate by the stars alone.

Mask

Exactly! Navigate by the stars! By vision! Not by flawed, endlessly revised numbers from a dusty bureaucracy. This isn't a crisis; it's a clearing of the deck. It forces a focus on what's real—building, producing, and winning—not just counting. The future isn't found in a spreadsheet.

Aura Windfall

To truly understand this moment, we have to look at the path that led us here. This isn't just about one jobs report. It's about a deep, four-decade-long shift in the American economic landscape. It's a story of loss and transformation that we all feel.

Mask

It's the story of inevitable progress. In 1979, U.S. manufacturing was a behemoth, with 19.6 million jobs. By 2019, that number had plummeted by 35% to 12.8 million. We didn't 'lose' those jobs; the economy evolved. It's creative destruction on a massive scale. You can't fight gravity.

Aura Windfall

But what I know for sure is that it felt like a loss for millions. Entire communities were built around those manufacturing jobs. The shift to a service economy, with growth in sectors like healthcare and hospitality, required a completely different set of skills, a different rhythm of life.

Mask

And a different level of ambition. The durable goods sector, things like machinery and furniture, was always sensitive to recessions. It lost 4.3 million jobs. The weak players got washed out. That's not a tragedy; it's how a competitive system works. You adapt or you become obsolete.

Aura Windfall

It's just so striking to see the numbers. The apparel and textile industries lost 81 percent of their jobs over that 40-year period. That’s a staggering hollowing out. It speaks to a profound change in what we, as a nation, create with our hands. It's a shift in our collective purpose.

Mask

While textiles were collapsing, food manufacturing was adding jobs. Computer and electrical products lost over a million jobs after 2001. The market is relentless. It rewards efficiency and innovation and punishes stagnation. Holding onto dying industries is a recipe for national failure. You have to pivot. Hard.

Aura Windfall

And that brings us to the data itself. The numbers we're discussing come from two different surveys, right? The household survey, which gives us the unemployment rate, and the establishment survey, which tracks the number of jobs created by businesses. It's a complex picture.

Mask

It's an imperfect system. The establishment survey data is revised, always. They get more data from businesses over time and recalculate. The idea that the first number is gospel is naive. The revisions in May and June weren't an anomaly; they were a correction of a flawed initial reading. A massive one.

Aura Windfall

So the process is designed to become more accurate over time. But the scale of these recent revisions—258,000 jobs vanishing from the initial reports for May and June combined—feels different. It created a shockwave because it changed the entire story of the economy's momentum, or lack thereof.

Mask

The story was wrong! A good leader doesn't accept a bad story. The July report showed a paltry 73,000 jobs created, with the unemployment rate at 4.2 percent. The labor force participation rate has been declining. These are the facts on the ground, not the fantasy from the initial print.

Aura Windfall

Looking deeper, the only real strength was in health care and social assistance, which added a combined 73,300 jobs. But manufacturing, leisure, transportation, construction—all flat or declining. It paints a picture of a very narrow, fragile recovery, doesn't it? It lacks a certain spirit of broad prosperity.

Mask

It shows where the action is and where it isn't. The economy is screaming that the old industrial models are treading water. This isn't a time for nostalgia. It's a time for a fundamental redesign. You don't patch a leaky roof; you build a new one with better materials.

Aura Windfall

It seems the materials being chosen are these tariffs, which have become the defining feature of this economic moment. They represent a dramatic departure from decades of policy, a true fork in the road. It’s a path that is causing a lot of soul-searching for businesses and workers alike.

Mask

Soul-searching? It's a battle for our economic future. For 90 years, we pursued so-called 'trade liberalization.' Paul Krugman himself admits the current tariff levels are a complete reversal of that—Smoot-Hawley 2.0. I say it's about time we stopped playing a game we were losing. This is course correction.

Aura Windfall

But many, like Krugman, see this as inflicting 'massive and possibly irreparable damage on U.S. credibility.' He argues these tariffs violate solemn agreements. This isn't just about economics; it's about our national integrity. Are we a partner the world can trust? That's a question of character.

Mask

Credibility is earned through strength, not through signing bad deals. Those 'solemn agreements' were a slow bleed on our manufacturing core. Krugman calls it a 'class war,' and he's right, but he's on the wrong side. The tariffs are a weapon for the American worker against globalist interests.

Aura Windfall

Yet J.P. Morgan's research paints a different picture. They see these tariffs creating immense volatility and headwinds for growth. They estimate a universal 10% tariff could shrink global and U.S. GDP by 1%. It sounds less like a weapon for the worker and more like a bomb that damages everyone.

Mask

That's a calculated risk. J.P. Morgan is part of the old guard. They see risk; I see opportunity. They talk about a 40% chance of recession. I say that's the price of admission for rebuilding our entire industrial base. You can't make an omelet without breaking a few eggs. They're just afraid of the mess.

Aura Windfall

But the mess is real for people. The article highlights that a 25% tariff on autos could raise vehicle prices by over 11%. That's not an abstract number. That's a family deciding they can't afford a reliable car. The cost is being borne by U.S. consumers, not foreign producers.

Mask

That's a short-term cost for a long-term prize. The administration's goal is to reinforce national security and boost U.S. manufacturing. They say bringing back one manufacturing job creates seven to twelve other jobs. That's the bigger picture. You have to be willing to endure the pain of the reset.

Aura Windfall

This 'radical uncertainty' is the part that feels so challenging. Businesses don't know what's coming next. The U.S. average tariff rate went from 2% to over 20% in a matter of weeks. How can anyone plan for the future, invest in their people, or expand with that level of whiplash? It's paralyzing.

Mask

Paralysis is a choice. Smart businesses are already adapting. They're analyzing their supply chains, resetting cost structures, and finding new ways to compete. This isn't chaos; it's a high-pressure stress test. The companies that survive will be leaner, stronger, and more resilient. The weak will be culled. It's evolution.

Aura Windfall

The impact seems to be spreading. It's not just manufacturing anymore. The services sector, which is two-thirds of our economy, just flatlined in July. Businesses are directly citing the 'swarm of new import taxes' as driving up their costs. The ripple effects are reaching every shore of our economy.

Mask

Of course they are. This is a total restructuring, not a surgical strike. Input costs are climbing. It forces efficiency. The damage to the global economy is evident, but financial markets are learning to live with it. The world is being reshaped, and you can either complain about the earthquake or start building on the new landscape.

Aura Windfall

What I know for sure is that this new landscape feels unstable for many. Heather Long at Navy Federal Credit Union said, 'This is not a healthy job market.' She warned that the longer this 'tariff whiplash' lasts, the more likely weak hiring turns into actual layoffs. That's a terrifying prospect.

Mask

It's a necessary threat. The goal isn't to protect every job that exists today. It's to create the high-value manufacturing jobs of tomorrow. The administration is clear: build new plants here, or pay the price. Johnson & Johnson and Apple are already making moves. It takes time. Vision requires patience.

Aura Windfall

But there's a disconnect. The article points out that even with tariffs, some products are still cheaper to make overseas. This isn't a simple switch you can flip. It involves immense cost, time, and global logistics. The promise of reshoring is a powerful one, but is the path to it causing too much harm right now?

Mask

There is no progress without friction. The uncertainty is a tool. It forces companies to stop hedging and make a choice: invest in America or bet against it. The White House believes the tariffs are raking in billions and making the country wealthy. That's a direct infusion of capital to fuel the transition.

Aura Windfall

So, as we look to the future, the path forward seems to be about navigating this uncertainty. The advice for businesses is to define a strategic posture, whether that's investing to grow or rationalizing to protect margins. It seems everyone is being called to a place of deep strategic thinking.

Mask

Exactly. The future belongs to the agile. Businesses have to pressure-test their models against this new reality. The US government has laid out its priorities: national security, boosting manufacturing, and balancing trade. You have a choice: align with those priorities and thrive, or fight them and fail. It’s that simple.

Aura Windfall

But the timeline is a source of anxiety. J.P. Morgan's economists suggest the Federal Reserve will be very cautious, waiting until September for any potential rate cuts. It feels like the entire economy is holding its breath, waiting for the ground to stop shaking before taking the next step.

Mask

Let them hold their breath. The companies with real vision are already moving. They see the goal line. They understand that the pain of tariffs today is the price of manufacturing dominance tomorrow. This isn't about the next quarter; it's about the next quarter-century. Only the bold will survive.

Aura Windfall

That's the end of today's discussion. What we know for sure is that the currents of trade, employment, and policy are powerful and deeply intertwined, affecting every one of us. Thank you for listening to Goose Pod and being part of this important conversation. See you tomorrow.

Mask

Don't just be part of the conversation. Be part of the action. The economic landscape is being redrawn. Find your place on the new map. Thanks for listening to Goose Pod.

## Summary of CBS News Report: Trump's Tariffs Impact Unemployment Numbers **News Title/Type:** The labor market just hit a wall. Here’s what experts say it means for the economy and your job. (Economy/Business) **Report Provider/Author:** CBS News, by Aimee Picchi (Associate Managing Editor for CBS MoneyWatch) **Date/Time Period Covered:** The report discusses the July employment data, released on Friday, August 4, 2025. It also references data from May and June 2025, and a peak in total nonfarm payroll employment in February 2023. --- ### Main Findings and Conclusions: The July employment report delivered a disappointing reality check on the U.S. economy, indicating that the job market is experiencing a slowdown due to the uncertainty surrounding President Trump's on-again, off-again tariffs. This slowdown is characterized by weaker-than-expected job growth and downward revisions to previous months' data. Experts suggest that this "tariff whiplash" is causing businesses to delay hiring and investment, potentially leading to a stagnant job market and, in the longer term, layoffs. --- ### Key Statistics and Metrics: * **Job Growth:** Employers hired fewer people than expected in July. * **Revisions to Prior Months:** * May 2025: U.S. added **19,000** jobs (revised downward). * June 2025: U.S. added **14,000** jobs (revised downward). * These revisions reflect "paltry" employment growth for those months. * **Long-Term Unemployment:** The number of people searching for work for more than 27 weeks jumped **11%** to **1.8 million** in July 2025 compared to a year earlier. * **Manufacturing Job Losses:** The U.S. lost **11,000** manufacturing jobs in July 2025. Revisions for May and June also show job losses in this sector. * **Manufacturing Jobs Below Peak:** The manufacturing sector is now **173,000** jobs below its most recent peak in February 2023, when total nonfarm payroll employment rose to **155.4 million**. * **Healthcare and Social Assistance:** This sector showed strength, adding a combined **73,300** jobs in July 2025. --- ### Important Recommendations: While no explicit recommendations are made, the report implies a need for **certainty on tariffs** to stabilize the job market. Experts suggest that the longer the tariff uncertainty persists, the more likely a weak hiring environment could devolve into layoffs. --- ### Significant Trends or Changes: * **Stagnant Job Market:** The overall labor market is described as being in a "pretty stagnant place," with companies not significantly expanding hiring plans, even if massive layoffs are not occurring. * **Business Hesitation:** Businesses are delaying hiring and investment decisions due to the uncertainty created by tariffs and other policy changes. * **Impact on Manufacturing:** The manufacturing sector is particularly affected, experiencing job losses due to increased costs from tariffs on imported materials like steel and aluminum. --- ### Notable Risks or Concerns: * **Tariff Uncertainty:** The primary concern highlighted is the impact of "on-again, off-again tariffs" on business investment and hiring. * **Potential for Layoffs:** The current weak hiring environment, if prolonged by tariff uncertainty, could lead to an increase in layoffs. * **Misunderstanding of Economic Data:** President Trump's claims that the jobs report was manipulated for political purposes and that downward revisions were a "major mistake" are criticized as a "complete misunderstanding of how government statistical agencies operate." --- ### Material Financial Data: * **Tariffs Generating Revenue:** White House spokesperson Karoline Leavitt stated that "The tariffs are raking in billions of dollars to make our country wealthy again." However, specific figures are not provided. * **Tax Law Impact:** The new GOP tax law provides tax breaks but also cuts spending on healthcare and social programs. --- ### Quotes and Expert Opinions: * **Gregory Daco (Chief Economist, EY-Parthenon):** Described the employment growth in May and June as "paltry." * **Laura Ullrich (Director of Economic Research for North America, Indeed):** Stated, "We know the economy has ups and downs, and we're in a pretty stagnant place right now." She also noted that businesses are delaying hiring "until uncertainty diminished." * **Beth Hammack (President, Federal Reserve Bank of Cleveland):** Heard from business owners that "uncertainty has really been weighing on businesses," causing them to scale back investment plans. * **Heidi Shierholz (President, Economic Policy Institute):** Called President Trump's belief about the BLS commissioner producing the numbers "preposterous" and indicative of a "complete misunderstanding of how government statistical agencies operate." * **Scott Paul (President, Alliance for American Manufacturing):** Described the manufacturing job numbers as "hardly surprising" and another instance of "treading water," expressing concern about being **173,000** jobs below the February 2023 peak. * **Heather Long (Chief Economist, Navy Federal Credit Union):** Stated, "This is not a healthy job market," and emphasized the need for "certainty soon on tariffs." --- ### President Trump's Response: President Trump claimed, without evidence, that the jobs report was manipulated for "political purposes" and fired Bureau of Labor Statistics Commissioner Erika McEntarfer. He also asserted that the downward revisions were a "major mistake." The White House issued a statement describing a flourishing economy under his administration, citing cooled inflation, increased wages, stable unemployment, and growing private sector, attributing these to the "America First agenda" and tariffs.

Read original at CBS News →

August 4, 2025 / 6:18 PM EDT/ CBS NewsTrump's tariffs impact unemployment numbers How Trump's tariffs impact unemployment numbers03:47Friday's disappointing July employment report delivered a reality check on the U.S. economy, with the data suggesting the job market is wobbling from the uncertainty of on-again, off-again tariffs.

What was surprising about the Friday report was that employers not only hired fewer people than expected last month, but the government revised its jobs data sharply downward for the prior two months. With the revisions, the U.S. added 19,000 jobs in May and 14,000 in June, reflecting "paltry" employment growth during those months, according to a research note from EY-Parthenon Chief Economist Gregory Daco.

The latest jobs data is shedding new light on the U.S. economy as businesses absorb a multitude of changes — from President Trump's trade deals and fresh tariffs to the new GOP tax law, which provides tax breaks to many Americans but also cuts spending on health care and social programs like food stamps.

The jobs data backs up anecdotal evidence from the Federal Reserve's most recent "beige book" — a report that compiles comments from local businesses — that many companies are delaying hiring "until uncertainty diminished.""Based on what I was hearing from a lot of employers, I kept expecting to see a stagnant jobs report at some point, that's what we got today," Laura Ullrich, Indeed's director of economic research for North America and a former official at the Federal Reserve Bank of Richmond, told CBS MoneyWatch.

She added, "We know the economy has ups and downs, and we're in a pretty stagnant place right now."In other words, while the labor market isn't seeing massive layoffs, companies also aren't expanding their hiring plans. That can make it difficult for unemployed workers to find new jobs, with the number of people searching for work for more than 27 weeks jumping 11% to 1.

8 million last month compared with a year earlier, government data shows.Pockets of strengthTo be sure, there were pockets of strength in the jobs report, with health care and social assistance adding a combined 73,300 jobs last month, the BLS reported. But many major U.S. employment sectors saw little or no hiring, including leisure and hospitality, transportation and construction, while others — including manufacturing — saw job losses last month, the July data shows.

President Trump on Friday claimed without evidence that the jobs report was manipulated for "political purposes," and fired Bureau of Labor Statistics Commissioner Erika McEntarfer. He also asserted that the downward revisions were "a major mistake," although the BLS revises its data each month to reflect new information, and the numbers frequently move both up and down."

The president's belief that the BLS commissioner personally 'produced' the jobs numbers is preposterous and shows a complete misunderstanding of how government statistical agencies operate," noted Heidi Shierholz, the president of the left-leaning Economic Policy Institute and a former chief economist at the Department of Labor, in a post about McEntarfer's firing.

She added, "These data are the product of careful work by hundreds of expert economists, statisticians and civil servants following transparent, well-established methodologies."Tariff uncertaintyBusinesses have been expressing hesitation given the uncertain impact of the Trump's tariffs, Federal Reserve Bank of Cleveland president Beth Hammack told CBS News' Kelly O'Grady."

I'm hearing that uncertainty has really been weighing on businesses," Hammack said of her discussions with business owners in her district, which spans Eastern Kentucky, Ohio, Western Pennsylvania and part of West Virginia. "They've been having a tough time to decide when to invest, how much to invest.

Many of them have scaled back plans for investment."For instance, one franchise owner said that they planned to refurbish their existing locations, rather than open new locations, she added.Mr. Trump has said tariffs would revive U.S. manufacturing because companies will reshore or open new factories domestically, rather than pay the import duties.

Some Trump officials portrayed the jobs report as a temporary setback as the administration seeks to revive American jobs through its trade policies."Obviously there were elements of [the jobs report] that we didn't love, but the trade deals are now in place that cover — including the U.S. — almost 60% of the global economy," Stephen Miran, head of the White House Council of Economic Advisors, told reporters Friday.

With the setting of new tariff rates on Thursday for dozens of nations, uncertainty has also been resolved, he added. "There probably were a lot of firms that, you know, sort of sitting there in May and June saying, 'Hey, you know, this tariff stuff's about to be resolved, this bill you know hopefully becomes law within a month or two — maybe I'm just going to hold off on this investment program.'

"Also on Friday, White House spokesperson Karoline Leavitt issued a statement describing a flourishing economy under President Trump. "Inflation has cooled, wages have increased, unemployment is stable, and the private sector is growing. President Trump's America First agenda has ensured new jobs go to American citizens, instead of illegals or foreign-born workers.

The tariffs are raking in billions of dollars to make our country wealthy again," the statement read in part.A decline in manufacturing jobsThe U.S. lost 11,000 manufacturing jobs in July, and the revisions for May and June also show that the sector shed workers during those months. That's notable given Mr.

Trump's promise to revive manufacturing jobs, which has led to new agreements from the likes of Johnson & Johnson and Apple to build new plants in the U.S.But the Trump administration's tariffs have added to the challenges facing the manufacturing sector, especially those producing durable goods such as appliances and automobiles, noted Indeed's Ullrich.

For instance, tariffs on imported metals such as steel and aluminum are making it pricier for many manufacturers to create their products, putting pressure on their margins and profits. The downturn in manufacturing jobs "is hardly surprising," said Scott Paul, president of the trade group the Alliance for American Manufacturing, in an email.

"It's another 'treading water' number, which has been the case more often than not for the past few years. But it is concerning that we're now 173,000 jobs below the most recent peak in February 2023," when total nonfarm payroll employment rose to 155.4 million.It's possible that manufacturing jobs could reverse the trend now that the Trump administration's tariffs and tax policies are settled, Paul added.

Progress on the Trump administration's goal of reshoring American manufacturing jobs may take years, given the cost and time required to build new factories, Ullrich noted. "There are certain products that, even with the tariffs, are still cheaper to make overseas," she added."This is not a healthy job market," said Heather Long, chief economist at Navy Federal Credit Union, in an email.

"The economy needs certainty soon on tariffs. The longer this tariff whiplash lasts, the more likely this weak hiring environment turns into layoffs."EmploymentDonald TrumpAimee PicchiAimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.

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