The reason unemployment ought to be higher is that the economy created only 22,000 jobs in August, after creating only 79,000 in July. The 79,000 figure represents a slight upward revision from an initial July estimate of 73,000 that so enraged Trump that he fired BLS Commissioner Erika McEntarfer and nominated to replace her a MAGA sociopath who, when Senator John McCain died, tweeted, “I like a senator who doesn’t die” (mimicking Trump’s repellant 2015 taunt about McCain, “I like people who weren’t captured”).
Still, overstated job creation is not why the unemployment rate should be higher. It should be higher because there ought to be more workers.
But lower birthrates, combined with a rapidly-aging population (there are about 1.5 million retirements per year) mean fewer workers, and the United States can’t remain the world’s biggest economy with a shrinking labor market. We therefore import labor, both legally and illegally. Or rather, we did. When Trump re-entered the White House this past January immigrants represented 20 percent of the United States workforce, according to the Pew Research Center. Now they represent 19 percent. In five short months the number of foreign-born workers has dropped by an astounding 750,000.
According to Pew, the disappearance of foreign-born workers is not entirely attributable to Trump’s policies. In June 2024 Biden cracked down on asylum for people who crossed the southern border illegally, drastically reducing monthly border arrests (already well below a 2023 peak of about 250,000) to about 50,000. As a result, Trump’s claim on entering office that border crossings were a national emergency that required deployment of armed troops was, as is so often the case, false. Border crossings did continue to fall under Trump, but any emergency, if there was one, had long since passed.
That would be more noticeable if economic growth weren’t down, too. In a speech last month, Jerome Powell observed that GDP growth during the first two quarters of 2025 was about half its rate during the same period in 2024. Meanwhile, Powell said, the “labor supply has softened in line with demand…. while the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers.”
The Trump administration claims, based on BLS data, that the number of native-born workers is growing while the number of foreign-born workers shrinks. But there’s a rough consensus that BLS’s estimate of foreign-born workers who’ve left since January (1.9 million!) is way too high and that its estimate of native-born workers who’ve entered the workforce since January (3.3 million!) is a statistical mirage. I won’t bore you with why. What is much more likely is that since January the labor market has lost foreign-born workers (again, about 750,000; some go as high as one million) but not gained native-born workers to any significant degree. Hence a smaller labor market and low unemployment.
The workforce is more native-born today than it was when Trump entered office. But the same xenophobia that motivates expelling foreign-born workers also motivates raising tariffs on foreign-made products. Trump thinks that makes the economy stronger, but it only makes the economy smaller, and that’s what’s happening. Even if unemployment remains stable for a while, eventually it will catch up as the economic slowdown starts to outpace deportations. Then the economy will be both smaller and weaker, and we’ll enter a recession. I hope there aren’t any cats.
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