Statistics show that, one year into Donald Trump’s second term, the economic lassitude of the Biden Recession is still weighing down the American economy, as it isn’t creating jobs.
While we will not be getting the payrolls report this week (due to a very brief govt shutdown), ADP’s Employment report paints a poor picture for hiring (even if jobless claims paints a healthy picture for ‘not firing’) adding just 22k jobs (well below the 45k expected).
22 thousand jobs isn’t even a dead cat bounce, it’s a rounding error. And the low jobless claims are just because most of the workers fired/laid off during the Biden Recession have run out of eligibility.
Goods producing firms added just 1k jobs (Construction +9k, Manufacturing -8k – which has lost jobs every month since March 2024) while Services firms saw only 21k jobs added (with health care a standout, adding 74k job, while Professional Services lost 57k jobs).
“Job creation took a step back in 2025, with private employers adding 398,000 jobs, down from 771,000 in 2024,” said Dr. Nela Richardson Chief Economist, ADP.
Interestingly, small firms saw job additions while large firms saw job losses…
We’re not seeing the massive manufacturing job losses critics of President Trump’s tariffs predicted, but we’re also not yet seeing any gains from the lowering of foreign tariffs.
Job seekers are discouraged by a plague of ghost job listings intended to provide the illusion of growth, with no intention of anyone ever being hired.
Inflation is low, yet consumer confidence is at the lowest level in more than a decade. Stocks are booming, yet no one seems to be hiring. (This seems to be my personal experience as well.) Trump and congressional Republicans have managed to lower taxes, yet the “animal spirits” of the American economy do not seem like they’re been unleashed.
Is AI eliminating jobs? Maybe, especially in the service sector (those AI agents everyone hates have probably replaced some humans on support lines). But tech has been a job growth driver for much of this century, and an AI infrastructure build-out seems to be sucking up all available venture capital (and then some) with very little to show for it in the way of actual profits thus far.
Maybe job creation will only resume after California’s billionaires have finished fleeing to avoid the proposed wealth tax.
Would aggressive rate cutting by the Fed help? Probably, but outgoing Fed chair Jerome Powell seems to be pursuing rate cuts with all the vigor of Æthelred the Unready.
The American economy seems becalmed in Hell, and no one seems to know why.
Tags: ADP, Biden Recession, Economics, Federal Reserve, ghost jobs, interest rates, Jerome Powell, Nela Richardson, tariffs, unemployment
My work has been fire and no hire since 2019. The oil and gas sector didn’t exactly boom during the first Trump Administration when oil prices sank to 1980s bust levels. Sure drill, drill, drill was great for the economy overall, but once onshore wells were opened up, big offshore projects slowed. This was followed by the NetZero Moon Shot that has worked as well as NASA Artemis Moon Shot.
Trump is doing a better job for the industry in his second term. There is just one problem for the larger labor market. A normal cycle time for a multi-billion-dollar project is 7 years, and the first 3 of that is subsurface and conceptual engineering, which doesn’t take a ton of people. Also, steel cutting during the fabrication stage still mostly occurs overseas. It will take time to get those jobs back here. The same goes for the other part of the energy sector, which is looking to boom to power the AI data centers. It takes a long time before we get to the fabrication stage, and the clock just barely started last year.
Learning Resources, Inc. v. Trump was argued at SCOTUS on November 5th, but the ruling(s) in this case testing the validity of the Trump tariffs has not yet been issued. Industry will not revise their CapEx plans and begin generating domestic jobs until this case is decided.
Even if SCOTUS decides in the Administration’s favor, it will take months for corporate CapEx plans to be revised and implemented. A decision favorable to Trump’s authority will produce manufacturing and capital goods producing jobs late this year, but actual production jobs will not develop until 2027.
Tim Pool keeps wondering if it’s a population thing. Did COVID kill more than we thought? Are we seeing the results of boomers dying while we had too few children?
Now I don’t entirely buy it but it does make me wonder how would we know….
Especially since çline go up” has become the meme of the immigration debate. Is immigration outflow affecting this also?
what I’d all this data out there telling us…
Another bit of data that’s interesting…
https://www.foxbusiness.com/media/mike-rowe-warns-troubling-trend-among-working-age-men-says-trades-answer
With the fall in immigration, US population growth is zero. Therefore, we don’t need to post huge job numbers to keep the unemployment rate steady. The 22K number isn’t good, but it isn’t horrible. Don’t compare it to the days when the population was growing.
Manufacturing jobs haven’t taken off for a variety of reasons, but the main one is that no one believes that the tariffs will last. Solid tariffs require Congress, not executive orders. As always, Trump did tariffs the easy way, not the smart way.
Lower interest rates won’t help much. Low interest rates reward consumption and discourage investment. If you want people to invest in new factories, then higher interest rates are needed to encourage investment in hard assets. Low interest rates encourage only consumption and market speculation. We’ve had low interest rates for decades now. How’s that working for the US manufacturing base?
[…] a week after I blog about the “no hire, no fire” economy, it comes out that the economy added 130,000 in January, the most since December 2024. […]