The Labor Department reported on Friday morning that the United States added 162,000 jobs in August — more than expected, particularly given how few jobs the country has added over recent months.

However, there is an open secret about these figures: monthly jobs reports are now barely worth the paper they're printed on, because the Bureau of Labor Statistics has little experience measuring a labor market suddenly depleted by President Donald Trump's mass deportations and the nearly as sudden retirement of the baby boomer generation. Much of what the BLS is now attempting amounts to guesswork. The agency's headline figure also excludes broader measures of labor-market health — such as hiring rates, labor-force participation, and the quality of the jobs created — which is why economists typically look past the top-line number to wage growth and hiring patterns when judging whether workers are actually gaining ground.

Beyond the headline number, the report points to three genuine reasons for concern:

1. Wages. Prices continue to rise faster than wages, which means most Americans are getting poorer. Average hourly earnings rose by just 10 cents, or 0.3 percent, for the month, bringing the year-over-year increase in hourly earnings to 3.1 percent. Prices, however, have risen 3.4 percent over the year. The result: most hourly earners are losing purchasing power. A 3.1 percent wage gain against 3.4 percent inflation is what economists call negative real wage growth — a pattern that historically weighs on consumer sentiment, since households experience it directly every time they pay rent, buy groceries, or fill their gas tanks.

Creating a large number of low-wage jobs is not difficult. It requires only that employers keep a lid on wages as they raise prices — and profits follow. But Americans need jobs that pay more: enough to cover the rent or mortgage, put food on the table, fill the car with gas, and care for children or elderly parents. The affordability crisis that Trump dismisses is real, and Republicans risk paying a hefty price at the polls for ignoring it.

2. Job stagnation. While employers are not laying off many workers, they are also not hiring. A low-hire, low-fire labor market creates few opportunities for advancement and is difficult for young people to enter. Economists sometimes call this a "low-churn" labor market: when workers stop switching jobs, wage growth typically slows with it, because job-switching has historically been one of the main ways workers secure pay raises. A stagnant labor market is better than one that is shedding jobs — but not by much.

3. Trump. The president is interfering in the jobs market and the broader economy in ways that could make things worse. Beyond waging a costly war in Iran and imposing costly tariffs around the world — both of which are driving up prices — he is also issuing extreme threats. Responding to the jobs number, and a new spike in the US trade deficit, Trump threatened to impose embargoes on unfavored countries if the Federal Reserve did not lower interest rates (Truth Social post):

"LOWER THE RATE OR I'LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT."

Trump would evidently like the Fed to lower rates to give the economy a boost ahead of the midterms. But lowering rates would likely open the gates to further price increases. In fact, the jobs report increased the odds of a rate hike, because it removed the major objection to one — that it would stifle employment growth. The threat also marks a further escalation of a long-running tension: presidents of both parties have periodically pressed the Fed for easier policy, but the Fed's independence is designed precisely to insulate rate decisions from political pressure, and markets have historically reacted badly when that independence has appeared in doubt.

The comment also raises a larger question about the coherence of the president's economic thinking. The very notion of ending trade with every country from which the United States buys more than it sells — a very large portion of the world — is absurd. The basic rationale for international trade, and the fact that a trade deficit is never itself grounds for halting trade, is something anyone with a fifth-grade education understands.

So who is advising Trump on the economy? Treasury Secretary Scott Bessent is proving he knows little about the economy, and there appears to be no one else around the Oval Office who does.

The biggest problem facing the U.S. economy right now is Trump.

Source: Raw Story