Unemployment Rate and the Economy

Ross Silver • July 10, 2025

The US job market continues to chug along despite heightened uncertainty about the economy and how President Donald Trump’s tariffs could shake out.According to the June jobs report, Job growth was solid at 147,000 and the unemployment rate was at 4.1%, down from 4.2%. 



Despite the continuation of fairly solid monthly employment gains, the jobs report  showed several potentially concerning signs. Nearly half of the jobs added were from the government sector. Private industry showed only the smallest gains in the last eight months. Additionally, the reduction in the unemployment rate was in part due to the fact that some people left the labor force, whether to retire, or voluntarily quit their jobs. Finally, the average work week for all private non-farm payrolls fell to 34.2 hours in June, down from 34.3 hours in May. This suggests that employers are reducing the hours of their employees. If this is the case, it is likely to see weaker job growth in the months ahead. 


Perhaps the biggest negative in this report is a slowing in the pace of wage growth.
The annualized rate of growth comparing the last three months (April-June) with the prior three (January-March) is just 3.2 percent, down from 3.7 percent year-over-year. According to Brian Bethune, an economics professor at Boston College, "The private sector was clearly losing momentum in the latter part of the second quarter, which does not augur well for the performance of the economy in the third quarter.”


Are these potentially concerning issues a real threat to the economy, or is it a necessary “hiccup” required to correct the problems caused by Biden-economics and the inflation that has ravaged the country since 2020? The policies that were implemented during the Covid Pandemic, in which the government paid people to stay home and not work has crippled this economy. Five years later, employers are struggling to find skilled workers who will work for a reasonable wage. In fact, they are struggling to find people who will just show up to work. This has created extreme wage hikes just to get people to show up to work, which is costly to the employer causing him to limit the number of hours his employees can work. For example, pre-Covid, unskilled construction laborers made an average wage of $10-$12 hour depending on their level of skill. Today, that same unskilled worker will not show up to work for less than $25/ hour. This creates an extreme burden on the employer, who now can either only hire one worker instead of two, or has to raise his rates to his customer in order to meet the demand of payroll. 


Another problem is the inflated interest rates that occurred during the past 5 years. This has caused increases to mortgage payments for those who are purchasing homes. This in turn increases the rent that a landlord has to charge in order to make his rental property pencil out. In Bend, Oregon, an average monthly rent payment for a 3 bedroom/ 2 bath 1500 sq. ft. home pre-Pandemic was between $1200-$1500/ month. Today, that same home would rent for $3000/ month. We all know that the cost of food and groceries have gone through the roof in recent years. The high cost of living makes it almost impossible for workers to accept a “reasonable” wage. They simply cannot live on less than $25/ hour due to the high cost of living.


A correction needs to occur in order to get things under control. Wages, rents, mortgages and food needs to become more affordable and reasonable. How this will occur has still yet to be answered. Maybe reducing the work week hours, and reducing wage growth is a start. But the government needs to do their part by not making it so easy for people to not go to work. There are a lot of people who choose to not go to work, because they make more off of their unemployment check than they would going to work. That has to stop! That will just promote laziness and lead to higher unemployment. Both are detrimental to the economy and the country as a whole. 



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