Reduction in U.S. Hiring Occurs Due to Trump's Trade Policy Emphasis
The U.S. job market saw a significant slowdown in July, with the country adding only 73,000 jobs, far less than the 115,000 forecasted. This news has raised concerns among Wall Street investors, who have sharply increased their expectations for a rate cut at the Federal Reserve's next meeting in September.
The July jobs report confirms the slowdown in job growth, according to Daniel Zhao, chief economist at Glassdoor. Blerina Uruci, chief U.S. economist for the brokerage T. Rowe Price, suggests that we could be past the worst, as hiring actually picked up a bit in July from May and June's revised and depressed levels.
Healthcare companies added 55,400 jobs last month, accounting for 76% of the jobs added in July. However, jobs in administration and support fell by nearly 20,000 in July. The unemployment rate increased to 4.2% in July, and Americans dropped out of the labor force, with the ranks of the unemployed rising by 221,000.
The weak jobs data makes it more likely that the Federal Reserve will cut short-term interest rates. After the revisions for May and June, the number of jobs generated by state and local governments in education in June fell below 10,000. The federal government also lost 12,000 jobs in July. The number of jobs cut in factories in July was 11,000, following a decrease of 15,000 in June and 11,000 in May.
The cost of tariffs is expected to be passed along to Americans, both businesses and households. Mainstream economists believe that Trump's tariffs will have a negative impact on the economy, raising consumer prices and causing sectoral distortions that have weakened job growth and broader economic health.
Trump's trade policies, specifically his 2025 tariffs, have had a mixed and generally negative impact on U.S. job growth and the economy. These tariffs have raised consumer prices significantly, slowed overall GDP growth, increased unemployment, and disrupted supply chains. While U.S. manufacturing output expands by about 2% in the long run due to tariffs, this gain is offset by declines in construction (down 3.5%) and agriculture (down 0.8%), indicating a sectoral trade-off.
Industries hardest hit by tariffs include motor vehicles, pharmaceuticals, and technology equipment, which face increased costs and compressed margins due to tariffs on previously low- or no-duty imports. These industries are reconsidering supply chains and sourcing to adapt to the changing trade landscape.
Several companies, including Walmart, Procter & Gamble, Ford, Best Buy, Adidas, Nike, Mattel, Shein, Temu, Stanley Black & Decker, have announced or said they would hike prices due to U.S. tariffs. Trump signed an executive order that sets new tariffs on a wide swath of U.S. trading partners, effective August 7.
In the housing sector, Drees Homes, a homebuilder, has hired about 50 people over the past year, bringing its workforce to around 950. Jobseekers are now emphasizing a better work-life balance, stable employment, and prospects for advancement.
In summary, while Trump's tariffs aim to boost U.S. manufacturing and employ a "U.S.-first" trade policy, the evidence suggests they have modestly contracted overall economic growth, increased unemployment, raised consumer prices, and caused sectoral distortions that have weakened job growth and broader economic health as of mid-2025.
- The July jobs report showed that healthcare companies added a significant number of jobs, accounting for the majority of the jobs added in the U.S. market.
- Despite the increase in jobs in healthcare, there was a decrease in jobs in administration and support, with nearly 20,000 jobs lost in July.
- The weak job market is causing concerns among Wall Street investors, leading to increased expectations for a rate cut by the Federal Reserve.
- The cost of tariffs is expected to be passed along to both businesses and households, with mainstream economists predicting a negative impact on the economy.
