Editors at National Review Online analyze the latest American employment numbers.
Investment gurus generally say that it is a mistake to put too much stress on one month’s numbers — not that that stopped stock markets’ taking another hit on the release of the latest job numbers. According to the Bureau of Labor Statistics, these showed a drop of 92,000, well below expectations (an increase of 50,000) and last month’s surprisingly strong increase of 162,000.
The shortfall had little effect on the unemployment rate, which has been moving up, but at 4.4 percent, it is not yet a cause for serious concern. Most troubling, perhaps, were the continuing job losses within the information sector, which have been running at around 5,000 a month for a year. Could they be evidence that AI is beginning to take a toll?
There are other signs that Friday’s numbers are part of a broader trend extending beyond IT or the shrinking federal government. Average monthly job gains in 2025 were the lowest in any non-recession year for two decades. That said, the picture brightens a little when looking at the prior week’s number for initial jobless claims, an unthreatening 215,000.
Some of the weakness in the labor market may reflect the lingering effects of a post-pandemic shakeout and the fact that the official unemployment rate had sunk so low that there was only one direction it could go. But any account of the softness must include the blows inflicted indirectly and directly upon business by “liberation day” and its chaotic aftermath. Tariffs were always going to hit company profits, the end customer, or both. Bad as those effects were always likely to have been on job creation, they will have been made worse by continuing uncertainty over where tariff rates — buffeted by negotiations, renegotiations, retaliation, legal uncertainty, and their use as a political weapon — would end up. We still do not know.
