TLDR:
- U.S. job market slowed in August, adding 142,000 jobs
- Unemployment rate declined slightly to 4.2%
- U.S.-born workers lost 1.3 million jobs over past year
- Foreign-born workers gained 1.2 million jobs in same period
- Economic implications and immigration policies under scrutiny
The U.S. job market is experiencing a shift, with recent data revealing contrasting employment trends between native-born Americans and foreign-born workers.
The August jobs report, released by the Bureau of Labor Statistics, shows a complex picture of the current labor market, highlighting both overall job growth and significant changes in workforce composition.
In August, the U.S. economy added 142,000 jobs, falling short of the 160,000 projected by economists. This figure represents a slight improvement from July’s 89,000 job additions but continues to reflect a cooling trend in the labor market.
The unemployment rate saw a marginal decrease to 4.2% from 4.3% in July, which had been the highest rate since October 2021.
A striking aspect of the report is the divergence in employment trends between U.S.-born and foreign-born workers over the past year.
Native-born workers experienced a loss of more than 1.3 million jobs, with their total employment dropping from 131 million in August 2023 to 129.7 million in August 2024.
In contrast, foreign-born workers saw significant gains, adding over 1.2 million jobs during the same period. Their employment numbers rose from 30.4 million to 31.6 million.
This shift occurs against the backdrop of increased immigration under the current administration.
The Congressional Budget Office reports that more than 9 million immigrants have entered the U.S. since the end of 2020, with about 2.6 million entering through lawful channels and an estimated 6.5 million crossing the border without prior authorization.
The jobs report does not differentiate between foreign-born workers who entered the country legally and those without authorization. However, the substantial increase in employed foreign-born workers underscores their growing presence in the U.S. workforce.
Several sectors showed mixed performance in August. Construction added 34,000 jobs, while healthcare saw an increase of 31,000 jobs, though this was lower than its 12-month average. The report also noted an increase of 65,000 in multiple jobholders and a surge of 527,000 part-time workers, while full-time workers decreased by 438,000.
Economists and labor market experts have expressed concern about the overall slowing momentum in the job market. While the current levels of job growth and unemployment might be sustainable over time, other indicators suggest a continued cooling trend.
For instance, the three-month average job growth has decreased from 211,000 a year ago to 116,000 in the latest report.
The hiring pace has also slowed, reaching its lowest level since 2014. Job openings are at their lowest since January 2021, and workers are quitting their jobs at the lowest rate since 2018, indicating decreased confidence in finding new employment.
Despite these concerns, there are some positive signs. Permanent layoffs, often considered a harbinger of recessions, have remained relatively stable. The gradual rise in unemployment is largely attributed to an increase in labor supply rather than job losses, as more Americans enter the job market.
The Federal Reserve’s interest rate policies have played a role in cooling the economy and labor market in an effort to control inflation.
While there are expectations that the Fed might start cutting interest rates, the effects of such changes would likely take months to impact the broader economy.
