A MART脥NEZ, HOST:
Cracks are starting to show in the U.S. job market. A report from the Labor Department this morning shows employers added just 22,000 jobs last month, and the economy actually lost jobs earlier in June for the first time in nearly five years. NPR's Scott Horsley is with us now. Scott, second month in a row, the jobs number comes in below expectations. So why is this happening?
SCOTT HORSLEY, BYLINE: A, the economy is slowing down. You know, consumers are getting careful about their spending, and employers are getting careful about their hiring as a result. You'll remember after that disappointing report a month ago, President Trump fired the Labor Department official who oversees these jobs numbers. The president's probably not going to like today's report any better. The unemployment rate climbed to its highest level in almost four years, and that revised figure showing a net loss of jobs in June, that's the first time we've seen that since the depths of the pandemic back in the winter of 2020.
MART脥NEZ: Which industries are downsizing?
HORSLEY: It's pretty widespread. The sectors that cut jobs in August include manufacturing, construction and oil drilling. Those are all industries the Trump administration has been trying to encourage. Domestic factories have been complaining for months now that the president's tariffs are weighing on their business, even though the import taxes are supposed to boost manufacturing in the U.S. Construction is feeling the effects of higher material costs and high interest rates, and we're seeing a slowdown in the oil patch, despite the president's efforts to promote fossil fuels. You know, over the summer, drivers benefited from cheap gasoline. The flip side of that is crude oil prices are now below the break-even point for a lot of oil producers. ConocoPhillips announced just this week that it plans to cut about a quarter of its workforce. That's more than 2,500 people.
MART脥NEZ: All right. Any bright spots in this report?
HORSLEY: Not really. One of the few industries that had jobs last month was health care, and even there, hiring has been slower than it had been in previous months. So it's really a tough market for people who are looking for work right now. Earlier this week, we got a separate report from the Labor Department showing that, for the first time in more than four years, there are more job seekers in the U.S. than there are job openings.
MART脥NEZ: Wow. And I understand the federal government has also been shedding jobs.
HORSLEY: Yeah, the federal government cut another 15,000 jobs in August, and the federal workforce is down by almost a hundred thousand workers since the beginning of the year. We expect to see more cuts at the federal level later this fall when some of the workers who took buyouts earlier in the year start to show up in the data when their severance payments run out. You know, one side effect of those federal job cuts has been a sharp rise in the unemployment rate among African American workers. Federal employment has long been a steppingstone to the middle class for African Americans who might face more discrimination in the private sector. With the steep drop in federal jobs, we've seen the Black unemployment jump from just over 6% at the beginning of this year to 7.5% in August. That's more than three full points above the overall job loss rate.
MART脥NEZ: I almost don't want to look at the stock market, Scott, to see how it's responding to these numbers, but tell us.
HORSLEY: Yeah, stocks are down this morning. Right now, the Dow's down about 335 points. They haven't fallen off a cliff. The silver lining for investors is this will likely push the Federal Reserve to lower its benchmark interest rate when policymakers meet later this month. Markets already expected that. They're even more confident after this weak jobs report. You know, the stock market likes lower interest rates, even if what's behind that is overall weakness in the economy and the job market.
MART脥NEZ: All right, that's NPR's Scott Horsley. Scott, thanks.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
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