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The Independent
03-07-2025
- Business
- The Independent
US labor market surprises with 147K new jobs last month despite Trump's tariffs causing economic concerns
The US labor market delivered a surprising boost last month, adding a robust 147,000 jobs, while the unemployment rate unexpectedly dipped. However, these positive headline figures concealed underlying weaknesses, as the American economy continues to grapple with the repercussions of Donald Trump 's economic policies, particularly his sweeping import tariffs and their unpredictable implementation. June's hiring figures modestly surpassed May's 144,000 payroll increase, beating economists' forecast of 118,000. The unemployment rate fell to 4.1 per cent from 4.2 per cent in May, with the number of unemployed individuals decreasing by 222,000, defying forecasters' expectations of a rise to 4.3 per cent. Labor Department revisions also added 16,000 jobs to April and May payrolls. Average hourly wages, however, rose by a cooler-than-expected 0.2 per cent from May and 3.7 per cent year-on-year, nearing the 3.5 per cent consistent with the Federal Reserve's 2 per cent inflation target. Healthcare jobs increased by 39,000, with state governments adding 47,000 workers and local governments 33,000. Despite the seemingly strong numbers, a deeper examination reveals a softening in the job market. Sarah House, a senior economist with Wells Fargo, noted: "On net, it was a good report. But when you dig underneath the surface, it was another jobs report that didn't look quite as good as first meets the eye." Private companies, for instance, hired only 74,000 workers last month, roughly half the 137,000 recorded in May, the fewest private sector hires since October, a month impacted by hurricanes. State and local governments added nearly 64,000 education jobs last month, a figure potentially inflated by seasonal quirks around the school year's end. Moreover, the US labor force – those working and looking for work – saw a decline of 130,000 last month, following a substantial 625,000 drop in May. Economists anticipate that Donald Trump's immigration policies and the associated fear of deportations will continue to push foreign workers out of the labour force. A shrinking labor force can artificially depress the unemployment rate, as jobseekers need time to find employment and can be counted as unemployed in the interim. Despite low unemployment, the cooling hiring trend has made it harder for young people or those re-entering the workforce to find jobs, leading to longer searches or unemployment spells. The Labor Department reported a significant rise in discouraged workers – those who believe no jobs are available – increasing by 256,000 last month to 637,000. Derek Wing, a communications manager laid off from a city government role in Seattle, described his experience as "terrifying". He noted major local employers like Microsoft continued to cut jobs, and he had heard "horror stories of people applying for jobs and then – crickets." "I had a couple of experiences where I would apply for a job and just feel like it was going out into the ether and never hearing back," Mr Wing recounted. However, his fortunes swiftly changed; he applied for a position with Gesa Credit Union and secured a role as a communications strategist just six weeks later, a timeframe he called "superfast in this economy". The unexpected strength in June's payroll figures is likely to reinforce the Federal Reserve's cautious 'wait-and-see' approach, maintaining current interest rates. This strategy allows the central bank to better assess the full impact of Donald Trump's tariffs and other policies on inflation and the broader job market. The Fed raised its benchmark interest rate 11 times in 2022 and 2023 to combat surging inflation. As price pressures eased last year, the central bank reversed course, cutting rates three times in 2024, with more cuts anticipated. However, the Fed has adopted a more circumspect stance this year. Carl Weinberg, chief economist at High Frequency Economics, commented: "Today's results are more than positive enough to reduce expectations for Fed rate cuts in the wake of tariffs and policy chaos, at least for now." Following the release of the jobs data on Thursday, yields on US Treasuries immediately spiked. Traders in the futures market now see less than a 7 per cent chance of the Fed cutting its main interest rate at its next meeting later this month, a sharp decline from the nearly 24 per cent chance seen just a day prior, according to CME Group data. Employers are now contending with the repercussions of Donald Trump's policies, particularly his aggressive use of import taxes, known as tariffs. Mainstream economists assert that tariffs inflate prices for businesses and consumers, diminishing economic efficiency by curbing competition. They also provoke retaliatory tariffs from other nations, harming US exporters. Donald Trump's unpredictable imposition of tariffs – announcing, suspending, then introducing new ones – has exacerbated anxiety, leaving businesses bewildered and hesitant to make decisions regarding hiring and investment. Sarah House of Wells Fargo anticipates monthly job growth to fall below 100,000 in the latter half of the year. She stated: "We're bracing for a much lower pace of job growth. There's still a lot of policy uncertainty."
Yahoo
29-05-2025
- Business
- Yahoo
Georgia can't afford Medicaid cuts
Guest opinion writer Natalie Crawford argues that proposed Medicaid cuts would hurt everyday Georgians and the state's Georgia, 1 in 10 adults or 2 in 5 children rely on Medicaid for their health care coverage, over 70% of which is federally funded. While Georgia already has one of the highest uninsured rates in the country with 1.2 million of our fellow Georgians living without critical coverage, lawmakers in Congress are right now weighing legislation that includes major changes to Medicaid which would reduce federal investment in the program by an estimated $625 billion. Not only would such reforms increase our already high uninsured rate and threaten Georgians' access to care, but they would also deeply harm our local economies and state, putting pressure on the state budget. Everyday Georgians, including those who don't receive their health care from the program, will ultimately be the ones shouldering the economic burdens caused by federal Medicaid cuts. Depending on the specific type of cut Congress ultimately enacts, Georgia could lose nearly 17,000 jobs, including nearly nine thousand healthcare jobs in 2026 alone. Georgia also potentially stands to lose $578 million in federal Medicaid funding, putting enormous pressure on our state budget, and forcing our state officials to make difficult choices about which programs will continue to get funding, potentially reversing the strides Georgia has made in addressing issues like maternal and infant mortality and mental health. If Congress were to move forward with the House-passed legislation, it's estimated that between 72,000 and 120,000 Georgians could lose Medicaid coverage. And, we know that when more uninsured Georgians show up to hospitals needing medical attention, rates of uncompensated care increase. More uninsured Georgians means that we all will pay more for our health insurance, as premiums will go up when hospitals raise their prices to shift the cost of uncompensated care to those who can pay. These higher premiums also impact Georgia's employers, especially our small business owners, who may have to make the tough choice between cutting employee benefits, reducing wages, or risking financial strain. Property taxes would also likely increase, because local governments rely on them to sustain struggling community hospitals. Included in the House bill is a framework requiring states to implement work requirements for certain groups of Medicaid enrollees, a method Georgia has piloted for the past two years in Georgia Pathways, Georgia's partial Medicaid expansion program, which launched in 2023. With its low enrollment numbers and high administrative costs, Pathways has proven that work requirements are burdensome to the state, the taxpayer, and the enrollee. In Georgia's 2025 renewal application for the Pathways program, the state has requested to decrease the frequency of work reporting requirements because of the administrative burden. Congress right now is proposing to add reporting requirements for Medicaid programs nationally, which goes against everything we've learned in Georgia. The impacts of proposed federal reforms to Medicaid would be felt most acutely by our state's most vulnerable communities. Folks living in rural areas are more likely to be served by Medicaid, and cuts to the program will threaten an essential revenue stream for our rural hospitals, who often rely more heavily on Medicaid reimbursement. Nine rural Georgia hospitals have closed since 2010, and as many as 18 more are now struggling and in danger of closing or dramatically reducing services. Cutting Medicaid may push many of those over the line. Such closures have ripple effects — local businesses will suffer or be forced to relocate when rural hospitals close, leaving thousands of community members without jobs and access to healthcare. As a proud lifelong Republican and former County Commissioner for Habersham County, I have spent decades pushing for fiscally responsible solutions for our state. Cuts to Medicaid are not only fiscally irresponsible, but they could threaten the livelihoods of our fellow Georgians and the economic opportunities that consistently make our great state a top state for business. Unfortunately, there are many influential voices who use divisive rhetoric, misinformation, and fear mongering to cloud the understanding of what the Medicaid program is delivering for our state, and who really benefits from this safety net. Chances are, you know someone who could lose access to their local hospital, their job, or their healthcare coverage as a result of the proposed Medicaid changes. It might surprise you to learn that I used Medicaid insurance as a young mother, which enabled me to have my first child and take care of my family without going into medical debt — or worse. Without it, I likely would not have been able to become a successful FinTech professional and small business owner, or fulfill my call to public service. Medicaid covers 40% of all babies and kids in our state, thousands of seniors in nursing homes and people receiving long-term care, and many hardworking adults like me. Buying into misinformation will lead to policy decisions that hurt our neighbors and our state economy. While Congress is considering harmful cuts, it's essential everyday Georgians be heard. If enough Georgians speak up for the health of our neighbors and our economy, together, a symphony of voices can rise above the noise. Call your representatives — let them know about the negative impacts that Medicaid cuts would have on Georgians like you and me. Remind them that work reporting requirements add costly red tape without improving accountability. Urge your friends, family members, and neighbors to do the same. A vote to cut Medicaid is a vote against the health — and the economic prosperity — of our state and Georgian families. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
