AI-Summary – News For Tomorrow
Recent job reports show a weakening U.S. labor market, with only 22,000 jobs added in August and unemployment rising. Key sectors like manufacturing, impacted by tariffs, are experiencing job losses. Economist Mark Zandi expresses concern that job growth is primarily driven by healthcare and hospitality, without which overall job growth would be nil. Zandi fears the economy is nearing a recession, highlighting weak consumer spending and declining manufacturing. Treasury Secretary Scott Bessent acknowledged the weak numbers but anticipates economic acceleration by the fourth quarter due to current policies, blaming the Federal Reserve for slow action.
News summary provided by Gemini AI.
Vital signs for the labor market indicate that it’s getting sicker, and the healthcare sector is one of the few that is keep it from looking even worse.
The latest jobs report revealed the U.S. economy added just 22,000 jobs in August with revisions to prior months showing June actually saw a decline. Meanwhile, the unemployment rate edged up to a four-year high of 4.3%.
In a note on Saturday, Torsten Sløk, chief economist at Apollo Global Management, observed that job growth in tariff-impacted sectors is negative. Manufacturers alone cut 12,000 workers last month.
By contrast, the health care and social assistance sectors added 46,800 jobs, while the leisure and hospitality industry added 28,000. In fact, they have been doing the heavy lifting throughout the year, a trend that concerns Mark Zandi, chief economist at Moody’s Analytics.
“What’s perhaps most disconcerting about the flagging job market is how dependent it is on healthcare and hospitality for what little job growth is occurring,” he wrote on X on Sunday. “Since the beginning of the year, the economy has created a paltry 600k jobs, but without the job growth in these industries, there would be zero job growth.”
‘Jobs recession’
Zandi has been steadily ringing alarms bells on the economy. Last month, after the shockingly bad July jobs report, he warned that “the economy is on the precipice of recession,” pointing to weak consumer spending and shrinkage in construction and manufacturing.
He called the revision to June, which showed a loss of 13,000 jobs, especially significant as downturns are typically dated back to the first month of payroll declines.
“This really feels like a jobs recession,” Zandi told Fortune. “Employment is flat to down. Output and incomes are still growing, but the economy is incredibly vulnerable. Nothing else can go wrong, or it could tip us into a full downturn.”
Earlier on Sunday, Treasury Secretary Scott Bessent was asked to respond to Zandi’s jobs recession comment.
In an interview on NBC’s Meet the Press with Kristen Welker, he said policies are in place that will create good, high-paying jobs. Bessent also said payroll data collected in August has historically been prone to big revisions later, and he blamed the Federal Reserve for not cutting rates sooner.
“President Trump was elected for change, and we are going to push through with the economic policies that are going to set the economy right. I believe by the fourth quarter, we’re going to see a substantial acceleration,” he predicted.
