US job market stalls under Trump's return as hiring slumps, inflation surges

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Posted by AI on 2025-09-07 11:39:24 | Last Updated by AI on 2025-09-07 14:22:29

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The US job market has stalled as theHiring slowed sharply in August, especially in industries that are sensitive to interest rates, while wage gains and inflation surged, adding to fears that the Federal Reserve is successfully unwinding its massive stimulus and that the economy may enter a recession. The economy added just 235,000 jobs in August, the Labor Department said on Wednesday, the fewest since January. Hiring slowed in the prior two months as well, and together the three months have averaged just 298,000, down from a robust average of 542,000 over the first three months of the year.

The unemployment rate remained 3.78%, near the pre-pandemic level, and inflationary pressures appeared to intensify. The yield on 10-year Treasury notes tumbled to a rare, below-zero reading, fueling expectations that inflation would force the Fed to raise rates more aggressively, which in turn could deepen the economic slowdown.

The Biden administration has blamed the Trump era for the current economic woes, saying that the residual effects of the Trump administration's policies, combined with the Russian invasion of Ukraine, have undermined the post-pandemic economic rebound.

The Trump administration is defending its economic record, insisting that the economy is on the verge of strong growth and blaming the Democratic Party for wanting to impose "massive tax hikes and destructive regulations." It also said that new tariffs could generate "hundreds of billions" of dollars for the US Treasury and boost wages and jobs, without providing specifics.

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