The August jobs report is highly anticipated as the Federal Reserve contemplates raising interest rates to try to slow economic growth and tamp down price increases — without damaging the labor market.
A jobs report showing a significant rebound from July’s negative 23,000 change in nonfarm payroll jobs, with unemployment holding steady in the low 4% range, would give the Fed more room to raise rates.
And — from a purely “health-of-the-labor-market” perspective — either outcome could be fine, a recent research paper by economists at the Federal Reserve Bank of Dallas argues. That’s because job creation in that range can still leave the unemployment rate at historically low levels. In an August 20 appearance on CNBC, Treasury Secretary Scott Bessent portrayed July’s dismal jobs report as part of a positive trend.
"The jobs that we're seeing are going to Americans,” he said. “After the deportations that we've seen during President Trump's administration, and the closing of the border — this unfettered migration — we don't need to produce as many jobs.”
Is the treasury secretary correct? Can the economy actually have lost 23,000 jobs in July, and have added only 20,000 jobs per month on average from May through July, and still call this a healthy labor market?
“We’re likely to have months where we see negative job growth, but the unemployment rate will not increase,” said Joe Brusuelas, chief economist at consulting firm RSM, “which is sure to confuse the American public.”
Persistent monthly declines in payroll jobs are typically associated with recessions, rising layoffs, and a sharply escalating unemployment rate.
But that’s not true right now, said economist Justin Bloesch, economics professor at the Cornell University School of Industrial and Labor Relations.
“If you tuned into jobs reports in the past, you’d be used to 100,000 jobs, 200,000 jobs being a good number,” Bloesch said. “If you are used to seeing big numbers and think, ‘Zero jobs is bad news,’ that’s just no longer the case.” | 
