Frank Nez 
Summary Video
On September 4, 2025, a sharp spike in U.S. job cuts and a weaker-than-expected jobs report dealt a significant blow to President Donald Trump’s claims of leading the “hottest economy in the world.”
Newsweek reported that U.S. employers slashed 85,979 jobs in August, a 39% increase from July, marking the highest August layoffs since the 2020 pandemic peak, according to outplacement firm Challenger, Gray & Christmas.
Coupled with a Bureau of Labor Statistics (BLS) report showing just 73,000 jobs added in July—far below the forecasted 110,000—and massive downward revisions for May and June, the data has intensified concerns about a looming recession.
Surge in Job Cuts and Weak Employment Data
The Challenger, Gray & Christmas report highlighted a grim August, with 85,979 job cuts driven by economic and market factors, including operation closures and bankruptcies, per Newsweek.
Andrew Challenger, senior vice president at the firm, noted, “After the impact of DOGE on the Federal Government, employers are citing economic and market factors as the driver of layoffs,” referencing the Department of Government Efficiency led by Elon Musk.
A separate ADP Research report showed private employers added only 54,000 jobs in August, well below analysts’ expectations, with leisure, hospitality, and construction as the strongest sectors in a broadly weak month.
The BLS reported that July’s job growth was a mere 73,000, compared to expectations of 110,000, with the unemployment rate rising to 4.2% from 4.1% in June.
Revisions slashed May and June job gains by a combined 258,000, prompting Trump to fire BLS Commissioner Erika McEntarfer, alleging the data was “rigged” to undermine his administration.
Economists, including former BLS head William Beach, criticized the move, warning it could erode trust in government statistics.
The labor market’s slack, with 7.2 million job openings in July—below forecasts—further signals a weakening economy.
Trump’s Policies and Economic Fallout
Trump’s tariffs, including a 10% universal levy and up to 145% on Chinese goods, have driven inflation, with Wisconsin Aluminum Foundry reporting a 35-40% order drop and layoffs, as earlier reported by FrankNez Media.
Moody’s Analytics’ Mark Zandi warned of a 35% recession risk, citing tariffs and a 1.2 million reduction in the foreign-born workforce due to deportations.
The economy grew at a 1.2% annualized rate in the first half of 2025, with core inflation at 2.8%, per ABC News and Forbes reports.
However, the DOGE-led federal layoffs, with over 200,000 workers terminated since January, including 62,242 in February alone, have further strained the economy.
California Governor Gavin Newsom called the July jobs report “way below expectations,” accusing Trump of “crashing” the economy.
Trump’s firing of McEntarfer drew bipartisan criticism, with Sen. Amy Klobuchar calling it “absurd” and warning of an “economic mess.”
Despite this, Trump and Commerce Secretary Howard Lutnick insist the economy is strong, with Lutnick claiming on NBC’s Meet the Press that tariffs will boost wealth.
The weak jobs data has boosted expectations for a Federal Reserve rate cut in September, with betting markets like CME FedWatch showing a 90% probability, up from 40%.
However, Fed Chair Jerome Powell noted inflation risks from tariffs, complicating monetary policy.
Trump’s approval rating remains at 39%, amid controversies like a potential government shutdown over a $4.95 billion pocket rescission and Epstein file disputes.
As the 2026 midterms approach, the economic slowdown and retail investor unrest could challenge Trump’s narrative of economic success, shaping the GOP’s political strategy.
Also Read: Chief Economist is Now Warning A Third of The U.S. is Already in A Recession
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