The biggest surprise of the jobs numbers was the loss of 55,000 jobs in hotels and restaurants. This was the biggest loss since the COVID pandemic in 2020. Many economists questioned this figure, given the tourism for the FIFA World Cup soccer games. But tourism, and thus employment in hotels and restaurants, has been declining under the Trump administration, while increasing in the rest of the world. Trump’s repeated claim to want to make Canada a U.S. state, his restrictions on travel visas, and harassment of tourists at U.S. borders and airports have made the United States a less desirable destination. U.S. hotels reported room booking during FIFA World Cup was below expectations, and some even said bookings were below usual summer rates.

An early sign of the impact of artificial intelligence or AI on jobs was the continued drop in information technology jobs. 9000 jobs were lost in this sector, marking the 17th time in the last 18 months jobs have been lost. Job losses in information technology and finance, which are almost all white-collar jobs most susceptible to AI replacement, have accelerated this year. In 2026, an average of more than 20,000 jobs were lost each month in these two industries.

While the unemployment rate ticked down in June to 4.2% from 4.3% in May, this was mainly because more than 700,000 workers dropped out of the labor force. This happens when jobless workers stop looking for work and are not counted as unemployed. Without this, the unemployment rate would have gone up in June to 4.5%.

Latino workers were hit especially hard, as their unemployment rate rose to 5.2% in June from 5.0% in May. At the same time, their labor force participation rate fell from 67.2% to 66%. If Latinos who dropped out of the labor force were counted as unemployed, their unemployment rate would have risen to 6.4%.

Wage growth for production and non-supervisory workers grew 3.4% from June last year, significantly behind the 4.4% increase in prices for the same workers as reported in June. The June inflation report will come out on July 14.

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The employment report, based on a survey of businesses, was strong relative to the weak hiring in 2025, with 115,000 new jobs created. There were still pockets of weakness, with government jobs declining by 8000, making April the seventh month in a row of job losses by government workers. Manufacturing also lost jobs, down by 2000 jobs.

However, the survey of households showed more weakness, with the labor force participation rate declining by 0.1%. Without this decline, the unemployment rate would have gone up. The unemployment rate was also held down by a big jump in self-employed workers, many of whom, like rideshare drivers, are really a new type of temp workers. Last, but not least, the broadest measure of unemployment, which includes people who gave up looking for work and people working part-time who can’t find full-time jobs, rose to the highest this year, at 8.2%.

Workers’ compensation, including wages, benefits and taxes paid by the employer, rose 3.1% in the first three months of the year (January to March) according to another BLS report issued Thursday, May 7. But prices rose even faster, meaning that real compensation, or the purchasing power of workers’ wages and benefits, actually fell by one half of one percent, or 0.5%, during these same three months.

This meant that the share of total output in the economy that goes to workers was only 54.1% in the first quarter, the lowest since these records began almost 80 years ago, in 1947. With more of the share of the economy going to corporate profits, rent, interest and small business income, it is no wonder that more and more people feel that the rich are getting richer, and the poor poorer.

The growing divide between haves and have-nots can also be seen in the contrast between the latest Consumer Sentiment report by the University of Michigan and the booming stock market. The Consumer Sentiment report, which covers the period of April 21 to May 4, fell to an all-time low of 48.2. This drop reflected consumers’ expectation of inflation to rise. Expectations are that inflation will jump over the next year from 3.3% over the last 12 months to 4.5% over the next 12 months. This will further reduce the purchasing power of workers’ wages.

In contrast, the stock market, as measured by the broad S&P 500 Index, is at an all-time high. The stock market is being driven by corporate profits and the fast-growing wealth of those at the top. In particular, semiconductor chip stocks have risen to about 15% of total stock market value, even higher than during the 2000 dot-com stock market bubble.

How have sales and business profits held up with so many working-class households struggling amid soaring gasoline prices? On one hand, more and more consumer spending is based on high-income households as the economic divide in terms of income and wealth continues to grow. On the other hand, lower and middle income households, mainly the working class, are borrowing more to make ends meet. The Federal Reserve report on consumer credit, released yesterday, May 7, shows that credit card borrowing increased at the fastest rate since the last bout of inflation, in 2022.

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The rise in unemployment has hit African Americans the hardest, as their unemployment rate has soared from 6.2% in January to 8.3% last month, climbing by more than a third this year. In contrast, the unemployment rate for white Americans has gone up too, but only 3.5% in January to 3.9% in November, an increase of a bit more than 10%. So the ratio of Black to white unemployment has gone from 1.77 in January to 2.13 in November. This is in part a reflection of the long history of Black Americans being “last hired, first fired” and in part the racist policies of the Trump administration, in particular the big cuts in federal government workforce, which disproportionately hits Black workers.

The October and November reports on net new jobs saw a loss of 105,000 in October, mainly from federal workers who took buyouts from the DOGE cuts six months earlier.

In the last six months, three have seen job losses, while three showed gains. During this time there was a net gain of just 100,000 jobs, or an average of 17,000 per month.

The actual numbers might be worse, as the annual adjustments have been to lower the job creation by about 50,000 jobs a month. If this holds true for the adjustment, or benchmarking, for 2025, the economy would have been losing jobs for the last six months at an average monthly rate of 33,000 per month.

Despite Trump’s goal of “reshoring” manufacturing to the United States through higher tariffs, in fact manufacturing companies have shed jobs every month since Trump proclaimed “liberation day” when he announced higher tariffs on almost every country in the world in April. One problem is that Trump has also tariffed many inputs like steel and aluminum that are needed for manufacturing, making production more expensive in the United States, offsetting the tariffs on imports of finished goods.

While Trump has said that high tariffs under the McKinley administration (1897-1901), during the time of U.S. industrialization, he forgets that it was immigrants, not native-born Americans, who filled the factories at the turn of the century. Trump has not only stopped immigrants and refugees at the U.S./Mexican border, he has terrorized communities with deportation raids, and is limiting legal immigrants and refugees.

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On October 15, a White House memo boasted a $13 billion investment in five Midwestern plants by automaker Stellantis. It also announced projects by Whirlpool, General Electric and others. Thanks to tariffs, Trump tells us, the prodigal sons of industry have returned.

But how does the scoreboard really add up for reindustrialization?

Not quite as advertised. These aren’t new factories; they’re old ones being retooled. Tariffs shoot manufacturers in the foot, since they drive up prices for supplies. Investing in new technologies takes skilled workers. This is a hard sell when ICE just deported over 300 Korean technicians from a Georgia car factory. Auto corporations, hearts full of liberal compassion, fear that “first they came for Hyundai.”

That said, there is a real attempt by both parties to “bring manufacturing back.” The truth is, this isn’t the same thing as creating jobs.

Putting America back to work?

The latest factories will be more automated than those of the past. For example, the Wall Street Journal reports that Hyundai’s latest auto plant in Georgia has a robot-to-human ratio of 2 to 1, compared to the 7 to 1 industry average. A study by the Society for Human Resource Management found that 23% of employment in direct production is mostly automated. While Trump promised booms in employment, the Bureau of Labor Statistics reported a loss of 12,000 manufacturing jobs in August alone. The Bureau predicts continued stagnation through 2034.

This trend is not new. In 1980, it took over ten hours’ labor to produce a ton of steel, and by 2018 this dropped to 90 minutes. Production levels have stayed constant, but the number of manufacturing workers has declined since 1979.

Automation not only reduces the number of jobs, it demands greater levels of education for the jobs it opens. Programming, overseeing, operating and repairing equipment often requires either college-level education or specialized training. Workers late in their careers, rural workers, or otherwise poor job-seekers are going to have a hard time accessing these skills.

Economist Robert Lawrence summarizes, “the sector should not be promoted as a vehicle of inclusive growth and employment for low-skilled workers.”

Falling rate of profit

Automation has sharpened the tendency for the rate of profit to fall. In order to undercut each other, manufacturers race to adopt the latest technologies. However, by doing so, they’re permanently raising the bar for machinery used throughout the industry (i.e. think the robot-to-human ratio discussed earlier). That means that a greater portion of their costs are constant. It’s impossible to squeeze an extra dollar out of a machine like it’s possible to exploit a human worker. The overall rates of profit can go down.

This can be seen in General Motors’ average annual operating margin, which went from 8.7% in the 1960s to negative numbers in the 2000s. Since 2008, car companies have been able to buck this trend to some extent. But this is the exception that confirms the rule: they needed help from Obama’s bailout and Biden’s subsidies. They’ve also sla