In a recent turn of events, Gary Cohn, vice chair of IBM and former director of the National Economic Council under President Trump, shared his thoughts on the job market’s current woes. During his appearance on “Face the Nation with Margaret Brennan,” he remarked, “We’ve seen the job market degrade,” though he speculated this may be merely a “temporary” situation.
The esteemed Federal Reserve recently opted to reduce its benchmark interest rate by 0.25 percentage points. It was the first such move since December, motivated by concerns over sluggish economic growth and an apparent stalling of the labour market. According to Fed Chair Jerome Powell, there’s now “a very different picture of the risks to the labour market,” despite his hesitance to overemphasise payroll job creation statistics. “It’s just one of the things suggesting the labour market is cooling off,” he observed.
Furthermore, Cohn drew attention to recent job data: “Over the last several months, we’ve seen job creation fall from over 100,000 per month to fewer than 50,000.” He mentioned companies cutting back on their workforce as a method to manage costs during these trying times.
The White House itself hasn’t escaped scrutiny, particularly with the recent dismissal of former Bureau of Labor Statistics Commissioner Erika McEntarfer. This followed the less than stellar July jobs report, highlighting the precarious nature of this political and economic landscape.
Cohn elaborated that in a “very difficult environment,” where tariffs and rising input costs come into play, businesses have a singular lever to pull—reducing labour costs. “We emerged from COVID with firms hoarding labour, anxious about attracting and retaining staff,” he said. “Now, they focus on expenses; labour being one of the most manageable.”
Interestingly, this shift isn’t confined to any particular sector. Cohn has it on good authority from corporate CEOs that the reduction in human capital, across varied business lines, is indeed widespread. In essence, firms are allowing their workforce to shrink naturally as retirements occur, a trend recognisable in the latest data.
Concerning the rate cut, Cohn noted, “The Fed’s recent actions provide us with critical insights,” referring not only to the rate cut but also to the consensus among Fed officials regarding their economic projections. He also highlighted their steadfast independence amidst recent disputes. “The Fed showcased their ability to think independently,” he said. They considered all economic data, delivering a projection well-tuned to the current economic situation.
The job numbers remain a focal point of debate, scrutinised heavily of late. This conversation cements the perception of an economy on tenterhooks, influenced by multifaceted challenges both domestic and global. For further reading, the [BBC](https://www.bbc.com/news/business) and [Bloomberg](https://www.bloomberg.com/economics) offer thoughtful analyses on the economic shifts in question.
This article was crafted by Kaia Hubbard, who diligently reports on political affairs for CBS News Digital from Washington, D.C.
