Aug 1, 2025 - Economy
Trump admin, construction industry are the biggest decelerators of job growth
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To understand what's causing weak job creation, it helps to unpack which sectors have decelerated most.
By the numbers: Last year, the economy added an average of 168,000 jobs a month. That has fallen to 35,000 over the last three months. But the slowdown is not even across sectors.
- Federal government employment bumped along, adding 4,000 jobs a month last year, but it has fallen by 16,000 a month this summer. That swing, reflecting DOGE cuts and other Trump administration cutbacks, is the single biggest source of deceleration.
State of play: The construction sector has also taken a major step back, going from adding 16,000 jobs a month last year to 2,000 a month this summer.
- It is somewhat harder to parse why construction employment is flatlining. Both more aggressive immigration enforcement and elevated interest rates are likely factors, putting pressure on the supply of workers and the demand for them.
- The leisure and hospitality sector — which includes restaurants and hotels, heavy users of immigrant labor — added 21,000 jobs per month last year. That dropped to just 12,000 this summer.
- Health care and state government employment, both big drivers of job growth in 2024, have also decelerated this summer, by 10,000 and 8,000 monthly jobs, respectively.
The intrigue: The hiring trend for U.S. manufacturers is fairly steady, despite the whiplash from President Trump's trade war.
- There is no sign of a boom from a shift to domestic manufacturing; but there is no sign of a bust as U.S. firms face higher tariffs on key inputs.
