Signs of trouble in the U.S. economy: Where are all the jobs?

Job growth in the U.S. has weakened. The unemployment rate has climbed to highs not seen in years and wage growth has sputtered. Crucially, the manufacturing sector has cut jobs for seven straight months in spite of the tariffs that were supposed to bolster American manufacturing jobs.

“What we are doing is not working,” said Justin Wolfers, professor of economics at the University of Michigan and a senior fellow at the Brookings Institution.

Wolfers says that since Trump imposed tariffs on April 1, the manufacturing sector has lost 67,000 jobs. And he says the reason is clear.

“The president put in place a set of policies that were substantially damaging to the United States. And the United States economy has done terribly. So that part seems pretty straightforward to me,” said Wolfers.

Canadian steel and aluminum are subject to a 50 per cent tariff. So any American company using that steel to make products has either had to find a new source, pay the tariff or make do with imports stockpiled before the tariffs kicked in.

Automakers have complained that the tariff regime will cost them billions of dollars.

The debate over the economic impact of Trump’s tariffs has been raging since the election last November.

Critics say the tariffs are a tax on imports, paid by American companies and would eventually slow economic growth.

The Trump administration has repeatedly dismissed that argument. It sometimes says the tariffs are paid by foreign countries (even while admitting the bill is eventually paid by American companies). But it has steadfastly claimed the president’s economic policies would lead to a golden age for American workers.

“Put simply, President Trump’s One Big Beautiful Bill will unleash our economy and deliver a Blue-Collar BOOM,” wrote the White House in a news release in June.

Just last week, Trump was asked to grade the U.S. economy.

“A-plus,” he said.

“A-plus?” questioned Dasha Burns, host of the podcast The Conversation.

“A-plus-plus-plus-plus-plus,” said Trump.

The administration has dismissed concerns about persistently high inflation and affordability as a “hoax” and a “con job.”

Public sector losses, private sector gains

And in a news release after the jobs numbers were released, the White House focused on the fact that the jobs lost were all in the public sector, while on average private sector payrolls expanded.

The White House isn’t wrong. The losses were indeed concentrated in the public sector as Department of Government Efficiency (DOGE) layoffs were mostly paid until the end of October. 

But the bigger picture — one in which job growth continues to slow — went largely unaddressed.

“The strong jobs report shows how President Trump is fixing the damage caused by Joe Biden and creating a strong, America First economy in record time,” wrote the White House.

The problem is, just about everyone agrees, the jobs data released this week is, at best, incomplete.

During the 43-day government shutdown, statistical agencies were not gathering the kind of data they’d normally collect.

Normally, government workers would go to specific stores and compare the unit price of an enormous basket of goods to measure inflation. Others would call American households and ask if they were working or looking for work.

None of that was done during the shutdown. As a result, a sort of fog has been cast over the data from October, November and even parts of December.

“It could take many months yet before a signal can be extracted from the noise unleashed by public sector layoffs, an unprecedented surge in policy uncertainty, and the government shutdown,” wrote Karl Schamotta, chief market strategist with the financial services firm Corpay.

What is known for certain is that the jobs market slowed this summer, at the same time that inflation started to tick up again.

What we don’t know is whether those trends continued, accelerated or recovered during September, October and November.

Weakening jobs market

What worries economists and policymakers alike is that if things did get worse, the data available right now may not have fully captured those changes.

“Historically, the U.S. job market has not softened calmly and quietly. It has weakened aggressively and suddenly,” said RBC’s chief economist Frances Donald.

But, Donald says, we can only work with the information that is available.

And the numbers this week show a weak jobs market got a little weaker.

Wolfers has been saying this was coming for months now. And he says it’s not only about Trump’s tariff policy. 

“What’s happening in the United States is not puzzling. It’s an incoherent, chaotic policy process that brings forward widely discredited policies and undermines consumer and business confidence and the trust of people around the world,” he told CBC News.

He points to immigration policies, the fact that Trump has run up a $1.8 trillion deficit in 2025 and has a long, established history of changing his mind without notice.

Wolfers says none of those engender confidence from consumers deciding where to spend, businesses deciding how to invest and foreign firms looking for new markets.

“That that would have some impact on the American economy and it would turn out to be negative is not surprising at all,” said Wolfers.