Live Updates: U.S. Hiring Expected to Cool
How resilient is the labor market? Amid signs of softer economic growth, the latest report on jobs will be watched closely.
The U.S. job market has remained surprisingly solid for months despite rising concerns about how President Trump’s policies, including tariffs and sweeping government layoffs, may affect the economy. In May, employers added jobs at a healthy clip.
But there have also been signs that the labor market is softening. Hiring has been primarily powered by two industries — health care along with leisure and hospitality — rather than being more broad-based. The unemployment rate has been slowly trending up and stands at 4.2 percent. Workers are taking longer to find new jobs.
So how resilient is the job market, really?
The latest indication will come on Thursday when the Labor Department releases its monthly snapshot of the labor market — and it is expected to show more of the same. Economists polled by Bloomberg anticipate that employers added 110,000 jobs in June, which would be a slight drop from the 139,000 added in May and align with a gradual cool-down. The unemployment rate is expected to tick up to 4.3 percent.
“One of the things we’ve learned hopefully in the last couple years is to not necessarily bet against the labor market,” said Cory Stahle, an economist at the Indeed Hiring Lab. “And also, you never know what the labor market is going to do.”
Still, the headline numbers in Thursday’s report are not likely to tell the whole story. Economists and Federal Reserve officials will also look below the report’s surface for evidence of weakness in the labor market, including any revisions that show hiring was shakier in previous months than initially reported.
Those numbers will matter greatly for the Fed, which has shown no urgency to cut interest rates given the labor market’s continued strength but has also said it is watching for signs of slowing.
Can we still trust the data coming out of the Trump administration?
It’s a question I get all the time — on social media, in comments on my stories, in conversations with friends and colleagues. That skepticism has only intensified recently, since the Bureau of Labor Statistics disclosed that it was cutting back collection of price data that feeds into the Consumer Price Index.
Here’s my answer: Yes, I still trust the data. But with some important caveats.
Many of the people asking this question are worried about the possibility of political interference in the data-collection or analysis process. There is no evidence that is happening.
People inside government agencies consistently say they are confident that the numbers being released by the Bureau of Labor Statistics, Census Bureau and other agencies remain reliable. They also say that the longtime employees who oversee these statistics will blow the whistle if that changes.
But while there is no evidence of political interference, many economists and other experts have a different concern: the gradual erosion in the quality of government statistics.
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Officials at the Federal Reserve, under pressure from President Trump to restart interest rate cuts after an extended pause, say they are prepared to lower borrowing costs if the labor market weakens.
But Mr. Trump’s own immigration policies risk making it much harder for those policymakers to know whether that is happening, putting a divided central bank in an even more fraught position as it debates when and by what magnitude to lower borrowing costs.
The Trump administration in recent months has moved to revoke the legal status of hundreds of thousands of immigrants and has conducted high-profile immigration raids at work sites in Los Angeles and other cities. It has stepped up security at the U.S.-Mexican border and has publicly threatened to deport as many as a million workers a year.
The full effect of those policies is not yet clear. But virtually all analysts expect the immigrant population to grow much more slowly this year, and perhaps even to fall. That could leave employers who rely on immigrant labor scrambling to fill positions, potentially pushing up wages and causing shortages of certain goods or services.
A shrinking immigrant labor force could pose a big problem for the Fed, making it harder to tell whether a slowdown in job growth is the result of falling demand for workers, fewer available employees or both. The shrinking pool of workers could also present another source of inflationary pressures beyond tariffs that officials would have to navigate.
“The Fed is in a challenging position,” said Betsey Stevenson, a former chief economist at the Labor Department who is now a professor at the University of Michigan. “They need to be really careful that what they’re seeing is actually weak labor demand and not contracting labor supply caused by Trump’s policies, and that’s tricky.”
