The August jobs report is not great even at face value, but in context it's actually worse than it looks.
The economy added 130,000 jobs in August and that doesn't sound too bad, but economists expected the economy would add at least 150,000 jobs and a significant portion of those 130,000 jobs were temporary hires by the federal government.
From CNBC:
The federal government hired 25,000 temporary workers in preparation for the 2020 Census in August, giving the overall jobs gain a big bump. Nonfarm payrolls increased by 130,000 last month, which fell short of Wall Street estimates for 150,000.
Employment in federal government rose by 28,000 in total in August, the Labor Department said Friday. Private-sector employment was up by only 96,000, the lowest pace since February.
The weakness largely came from the retail sector, which saw a net decline in workers of 11,100 in August alone. Trade, transportation and utilities also lost 11,000 jobs, and mining and logging lost 5,000 positions.
In short, the economy is shedding jobs in all the areas we expected it would under Trump's trade war.
The retail industry is cutting jobs as Trump's tariffs increase the cost of stocking their shelves while the transportation industry that delivers goods to the retail industry is cutting jobs as their orders decline. Utilities, mining, and logging companies are also cutting jobs as manufacturing activity slides into recessionary territory. At some point -- perhaps even already -- this will become a feedback loop where weakness is one sector perpetuates weakness in another.
What raises my eyebrow is the fact that these numbers predate Trump's new tariffs on $150 billion in Chinese goods, the vast majority of which are consumer goods that people buy from retailers.
The federal government isn't going to hire another 25,000 temporary workers and there are good reasons to think these industries will cut more jobs as Trump's trade war escalates. It's anyone's guess what the next jobs report will look like.
Jobs reports in the near future could be bolstered by temporary seasonal hiring, but I think the best of times could be behind us.