Job growth of 22,000 in August, downward revisions made to the job numbers in June and July as per CEI's analysis

In a surprising turn of events, the job market is facing a new hurdle as there are now more job seekers than job openings for the first time since the Covid pandemic in 2021. This shift, partially reflected in the August jobs report, comes amidst the administration's efforts to shrink the government.

The federal workforce has experienced a decrease of 97,000 employees, according to the report, with the administration's efforts to reduce the size of government being a contributing factor. However, it's important to note that the Labor Department counts those still receiving severance pay as employed, contributing to the federal employee numbers.

The economy gained only 22,000 jobs in August, a figure that was revised downwards by a combined 21,000 workers compared to earlier reports. Job loss in the domestic manufacturing sector was also evident, with a decrease of 12,000 jobs in August and 78,000 jobs so far this year.

Long-term unemployment has also seen a significant increase, with 385,000 more people falling into this category this year. The unemployment rate and the labor force participation rate remained relatively unchanged in August.

The coming months may be rougher for the job market, according to Ryan Young, Senior Economist at the Competitive Enterprise Institute (CEI). Young's statement implies that the constantly fluctuating tariff policies are hurting the job market, making long-term planning difficult for employers.

Nicole Mayer-Ahuja, an economist, criticizes the government's tariff policy towards labor market development, arguing that the unstable tariff policy determines hirings in the long term. The current administration's tariff policies are reportedly hurting domestic manufacturing, not boosting it as intended.

Growth in the labor market is also affected by tariffs, long-term unemployment, federal job cuts, and unsettled inflation. A potential economic stimulus from a rate cut comes with a tradeoff: higher inflation. The Federal Reserve's reluctance to cut rates is due to inflation still being higher than the Fed's target.

In conclusion, the job market is facing several challenges, including government downsizing, tariff policies, and inflation. These factors are contributing to the current state of the job market, with more job seekers than job openings for the first time since the Covid pandemic. The coming months may bring further clarity and potential solutions to these issues.

Job growth of 22,000 in August, downward revisions made to the job numbers in June and July as per CEI's analysis