| Call it a “no-hire labor market.”
That’s how economists at Morgan Stanley reacted after disappointing employment data released today ignited concerns that the jobs market is looking to be much weaker than expected. The numbers show that employers added 22,000 jobs in August and the unemployment rate rose to 4.3%, its highest level since 2021. What’s more, revisions to previously released data show that payrolls were negative in June for the first time since December 2020. The youth unemployment rate jumped to 10.5% in August, the highest since late 2016 save for the pandemic period, according to Bloomberg Economics. Hiring was again driven by the health care industry while sectors such as information, financial activities, the federal government and business services all posted outright declines. Politically hot manufacturing jobs fell by 12,000 and are now down by 78,000 over the year. The question now: Does the jobs data continue to deteriorate from here or is a bottom in sight? President Donald Trump and allies were quick to lay the blame at the Federal Reserve’s doorstep for not cutting interest rates by now. Labor Secretary Lori Chavez-DeRemer said in a statement that “the Fed is failing American workers by dragging its feet and refusing to lower rates.”
 A commuter in Washington in March. Photographer: Al Drago/Bloomberg White House economic adviser Kevin Hassett told Fox News that billions in planned corporate investment means “that the jobs will surely come.” The weak data more or less locks in an interest rate cut by the Fed when policymakers meet on Sept. 16-17. The challenge will be how deep it can cut during a period of still persistent inflation. New data on prices next week will offer clues as to whether tariffs are starting to flow through to prices more broadly and if services’ costs are also climbing. The political heat won’t be diminishing anytime soon. Treasury Secretary Scott Bessent assailed the Fed for putting its own independence at risk through “mission creep” and called for an independent review of the central bank, including its monetary policy. “At the heart of independence lies credibility and political legitimacy,” Bessent said in an opinion piece in today’s Wall Street Journal. “Both have been jeopardized by the Fed’s expansion beyond its mandate.” — Enda Curran | 
