BREAKING: September Jobs Report Falls Far Short of Forecasts (w/JVL)

Receipts with Catherine Rampell

Catherine Rampell and JVL analyze the weak September jobs report, attributing the slowdown to mass deportations and reduced immigration rather than a lack of employer demand. They examine Trump's

Key takeaways

• September jobs report added only 29,000 jobs, significantly below forecasts, with prior months revised downward.
• Mass deportations and reduced immigration have shrunk the labor pool, directly causing the job growth slowdown despite employer demand.

Main topics

• September jobs report and labor market trends
• Immigration, deportations, and workforce shortages

Notable quotes

In certain levels of inflation will also pay off that debt very rapidly.

Conclusion

The episode underscores how protectionist trade policies, aggressive immigration enforcement, and politically motivated

Transcript preview

Speaker 1 (0:00) For many of us, going further isn't a choice. It's a feeling we can't ignore because ambition has a way of outgrowing where it began. Speaker 1 (0:11) Turning dreams into direction. Speaker 1 (0:17) Every journey brings us closer to the life we imagine. Speaker 1 (0:23) So, where will your journey take you? Etihad. Beyond borders. Speaker 3 (0:32) Hey, everyone. I'm Catherine Rampell, economics editor here at The Bulwark, joined by my colleague and friend JVL to talk about all things economics and business and inflation, what's happening in your world and the world writ large. We are going to talk about what I think is like a five alarm fire that Donald Trump just lit in how he is now talking about resolving. I know. It's a five alarm. Speaker 2 (1:02) I know. Presidents are typically very cautious people. They measure their words. Well, Speaker 3 (1:09) not so much in this case, at least as it pertains to the future for inflation. But before we get to that delicious little nugget, let's talk about the news of the day, which is the jobs report. So we got the jobs report today. It was kind of weak. Only 29,000 jobs were added. That was way less than what had been forecast. And the previous couple of months were also revised downward. So like what had looked like a gangbusters month in August turns out to have not been quite so spectacular once all of the numbers actually rolled in. So that's basically the headline. JBL. Is this an economic golden era? Speaker 2 (1:59) You know, Kevin, you're going to have to help me here. I'm looking at these lines, and all the ones where the lines are up a lot seem to be during a time when there was a different president. It Speaker 3 (2:14) seems like the Speaker 2 (2:15) job growth was really good starting around January 2021. All the way through December of 2024. And then it looks like starting around January of 2025, you get all these down lines. And the ones that are up are really, they're little. Speaker 3 (2:33) Okay. So this is an astute observation from my colleague here about the trends in this chart. In fairness, in fairness. A lot of those numbers in the Biden administration were certainly boosted by the fact that we were reopening the economy after COVID. Who was president Speaker 2 (2:52) during COVID when the economy closed, though? Was it a Democrat? Speaker 3 (2:56) This is one of the great mysteries of political economy. Nobody knows. Impossible to say, Catherine. Speaker 3 (3:04) Nobody knows. The other thing that happened around that time that kind of gets glossed over in all of this and that helped sustain those huge job gains was the fact that we did have a lot of immigration. Obviously, Americans have complicated feelings about the fact that we had a lot of immigration during that time. But it was largely what helped sustain these. phenomenal job growth numbers. The economy was hungry for workers. Remember, there were all of these stories about labor shortages and nobody wanted to work anymore, blah, blah, blah, blah, blah. Supposedly, everyone was just like on the government dole. And it was the case for a while that for some category of workers, they might have made more money with unemployment insurance than they did from their usual jobs. That was the case for a brief period. But we continued to have these labor shortages for a long while after that. And that was largely about initially a decline in immigration that was then reverted to an increase in immigration. So that's part of the reason you had these really strong jobs numbers. The Fed at the time actually credited immigration with some of the slowdown in inflation that we experienced because they were like, look, we had these shortages. We had the supply chain, you know. knots. And now there are workers to help kind of untangle those supply chains. Now we have the reverse of that, which is that we have these mass deportations. We have mass illegalization, de-documentation events like we have covered extensively, including with our visit to Springfield quite recently. Lots and lots of workers who have been here illegally and have been here with work authorization, legal work permits are losing them. They're not able to work. And the result is that you don't actually have as many people to fill jobs. So even if employers want to hire, there aren't as many people to hire. So I think that's a large part of the reason you're actually seeing this slowdown in job gains. It's just that like you don't have as many people to hire. And that's so so the fact that unemployment has kind of. stabilized. That's partly what this is about. Unemployment has stabilized. Job growth itself has come down because we just don't have as many workers. And so you don't need as many new hires to kind of like just tread water with the unemployment rate. So that's partly what's going on here. Speaker 2 (5:46) Maybe we could bring in some more white South African immigrants. To help spur job creation? Maybe that's the real problem here is we don't have enough white South African immigrants. Speaker 3 (5:58) If they want to work as home health care aides and construction workers, agricultural workers, food services, a lot, you know, lots of other industries and occupations where immigrants are disproportionately employed and where it is often hard to find people willing to do this backbreaking work, you know, more power to them. I'm sure employers would be happy to have their contributions to this economy and to their communities. I don't know that that's going to happen any time soon. There were some other interesting things to flag about this report. Justin Wolfers over at the University of Michigan and Platypus Economics had a couple of posts, a couple of charts that I thought were interesting. One showing... That it's basically health care and social assistance that has been sustaining the economic recovery since Donald Trump got into office. So those sectors are growing. The rest of the economy is shrinking. And so, you know, these are health care, social assistance. These are sectors that are subsidized, you know, very heavily subsidized by the federal government. So it's partly these things are growing because. The country is getting older and is in need of more health care. But also they're growing because the government is funding a lot of that health care. So I thought that was kind of interesting. Speaker 2 (7:28) You know, I keep hearing about all the new manufacturing jobs for the forgotten men and women of America. Are they not? Why aren't they having a line go up? Speaker 3 (7:36) Well. We've had a little bit of job growth in manufacturing in the last few months, but relative to where it was when Trump took office, it's still down. So it kind of like went down and then is ticking up a little bit. But yeah, manufacturing in general is worse off today. You mean it went Speaker 2 (7:55) down from when Biden was president, right? Yes. Sorry. Speaker 3 (7:58) Sorry. When? Yes. And Speaker 2 (8:01) all these people voting for their economic self-interest. Happy to see them get. Speaker 2 (8:06) Get what they voted for. I Speaker 3 (8:07) love it. Well, the manufacturing sector is interesting. It's been struggling a lot with the trade wars. Of course, Donald Trump has said that he was helping manufacturing with his trade wars, right? He was going to make sure that we didn't get ripped off anymore and that he was going to force other countries to buy our goods, blah, blah, blah. That was going to have a big manufacturing renaissance in this country that did not materialize in part because he forgot. that U.S. manufacturers also buy stuff from abroad. So when we make automobiles and kitchen appliances, those things use steel or aluminum or copper or other kinds of inputs that Donald Trump has slapped very, very high new tariffs on. And so they're like, there are many fewer people who are working in this country producing steel products who might like. producing the steel itself, who might benefit from steel tariffs. Many fewer of those people than there are people who work with steel to make other higher value add stuff like cars. I forget what the ratio is, but it's like for every steel worker, there are like 70 to 80 workers whose jobs depend on using steel. So a lot of those downstream consequences have not been so great. In Speaker 2 (9:22) fairness to the president. It was literally impossible for him to have known that. Nobody has any idea where the inputs for value-added manufacturing come from. We had all assumed, and I was as surprised as he was, that these things were made by Star Trek-style replicators that Speaker 3 (9:42) just Speaker 2 (9:42) transformed matter. And so, again, I mean, I had as much egg on my face as the president did. Speaker 3 (9:49) Yeah, it's funny that you say that because like even in the 1700s, the mercantilists who Donald Trump is styling himself after knew this was a bad idea. They knew that you didn't tariff your inputs. Speaker 2 (10:03) You Speaker 3 (10:04) didn't tariff the raw materials. Instead, you tariffed the finished goods. If Speaker 2 (10:09) you were really, if all you were trying to do was like. Speaker 3 (10:12) minimize imports and maximize exports. You didn't make more expensive the things that you need to produce the finished goods. The other chart that Justin had produced that I thought was interesting was one showing what's happened to men versus women in this economy. And this is related to what we were talking about with health care, right? Women are disproportionately employed in health care. Men are disproportionately employed in big brawny. jobs like manufacturing and construction. So, um, so these things are related, but it is interesting because like this administration has been so fixated on this hyper masculine country, you know, hyper masculine economy, hyper masculine iconography. You have people like Pete Hegseth talking about, you know, no, no fatties and no weirdos and, and beardos and whatever else. Uh, you know, just warriors. So it's not, it's like part of their ethos for how they recruit for the military. It's part of their ethos for their, their posters from DHS about like the, the country that they're trying to return us to the golden era that they're trying to return us to. It's all these very, very like Aryan looking Speaker 2 (11:29) square. Speaker 3 (11:30) Yes. Square jawed white men. Those are the people who Donald Trump is supposed to be rewarding with opportunities. And. Economically, at least, that does not appear to be predominantly the case. You have women Speaker 2 (11:45) who are gaining Speaker 3 (11:47) the vast majority of the jobs, and that has to do with the fact, it's not a Trump-specific thing, that has to do with the fact that we're growing in healthcare. We're growing in social services and not doing so well in some of these traditionally manly jobs. Speaker 2 (12:04) Also, education rates higher for women than men. Just a couple of things. I mean, first of all, again, I'm just spitballing here. I'm not here to nitpick. I'm here for solutions. Maybe the problem is low testosterone among American men. And Pete Tegseth has instituted a regime of testosterone testing for male soldiers over the age of 30 because he does not want any low T soldiers. He wants to do hormone therapy. He wants to do gender reforming Speaker 3 (12:31) care. Speaker 2 (12:31) Gender reforming care. So maybe we just need to nationalize that. And really, because maybe that's really what this is all about. Just, you know, a bunch of soy boy beta cucks out there who need some good old tea, vitamin tea. Speaker 2 (12:46) One of my theories, Catherine, is that over the next 10 years, you're going to see. You know, like ideas start like way out in the fever swamps and then they migrate their way in towards the mainstream. Like birthright citizenship, right? Ending birthright citizenship began as like a crazy thing from this one guy at the Claremont Institute. And then it became like the president of the United States just signing executive order. Repealing the 19th amendment. is going to pop at some point from the Gripers. And the idea that like, oh, women have ruined everything. We got to stop their voting. That's going to be a thing. At some point in the next 10 years, I believe you're going to see that emerge from the far, far, the Nick point is right. I Speaker 1 (13:34) think Speaker 3 (13:34)