The Weekly Wrap: The Jobs Report Was Much Better Than It Looked
Welcome back to Friday! The jobs report fell far short of expectations this week but there was plenty of good news buried beneath the rubble. Especially if you are a student hoping to see your teachers and school staff fired. But, also, this was the best month in quite a while for durable goods manufacturing employment.
Meanwhile, people are worried that married black mothers are relying on their husbands.
Let’s go.
Manufacturing Is Booming—The Employment Story
The July jobs report was officially disappointing. The U.S. economy shed 23,000 jobs, missing estimates for a gain of nearly 90,000, and the estimates for the previous two months were cut by more than half. That’s not the kind of headline a Republican president wants the public to be looking at four months ahead of midterm elections.
But the headline loss concealed impressive strength in durable goods manufacturing. Payrolls at durable goods factories climbed by 18,000 in July, following a 12,000 job gain in June and a 14,000 job gain in May. Both the June and July numbers were significantly revised up, meaning the sector was even stronger than we thought.
More importantly, it is now clear that the long stretch of declining employment in durable goods manufacturing has been decisively reversed. The employment level in durable goods fell consistently from December 2023 through December 2025. Since then, it has trended back up, rising every single month this year.
That should kill off the media-manufactured narrative that manufacturers were somehow struggling because of tariffs—although the media can stay irrational longer than many legacy outlets can stay solvent.
Manufacturing Is Booming—The Output and Productivity Story
We’re not just adding jobs at factories. The workers at our factories are getting more productive, working longer hours, and producing more goods.
The Labor Department reported Thursday that manufacturing output rose at a 4.6 percent annual rate in the second quarter. Hours worked increased 2.6 percent. Productivity, which measures output per hour, rose 1.9 percent. Durable-goods output rose at a 7.3 percent annual rate in the second quarter. Hours increased 4.5 percent, productivity rose 2.7 percent, and unit labor costs fell 1.6 percent.
Over the six quarters since the end of 2024, real durable manufacturing output has risen 6.2 percent. Productivity has increased 5.2 percent. Labor hours are up around one percent.
Getting productivity up while hours worked are rising requires output to rise even faster. It’s relatively rare for all three measures to rise at the same time. The first two quarters of this year mark the first back-to-back occurrence since 2018.
According to the mythology of anti-tariff economists, this should not be possible under a regime of higher tariffs. Their dogma insists that we’re already making everything we can as efficiently as we can, and if we impose tariffs, we’ll become less efficient. Rising output, hours, and productivity reveals this as the canard it has always been.
Buy More Burritos or We’ll Fire This Hostess!
There was a lot of talk on social media this week about the price of burritos. Young people complained they cost to much. Grumpy libertarian types said the kids these days were too soft. In their day, everyone grew their own beans, climbed the beanstalk, and then slew the giants at the top and took their burritos.
Restaurant and bar employment fell by more than 26,000 in July, according to the jobs report. So does this mean the kids should actually be buying more avocado toast and burritos?
Sadly, no. The best explanation for this decline was the end of the World Cup. This pumped up demand for dining out and drinking beer in saloons while it lasted, requiring owners to hire on more staff. But as the crowds departed, employment shrank.
What Happened to the Schools?
A big reason the total employment level fell in July was the decline in payrolls at public schools. That was surprising. Our theory is that this was what economists call residual seasonality. In particular, many school districts in the Northeast and Midwest extended their school years into the summer to make up for an unexpectedly high number of snow days during the 2025-26 academic year. So employees who would normally have been let go for the summer months remained on past where the seasonal adjustment thought they would.
Don’t Call It a She-Cession
Bloomberg News is officially alarmed over the decline of the participation of black women in the formal labor market.
Here’s how they explained it:
Black mothers with young children are leaving the workforce at an alarming pace.
Labor force participation among Black mothers aged 25-54 with children under 5 has fallen 11.5 percentage points in just three months, dropping to its lowest level in over 30 years, according to an analysis of Bureau of Labor Statistics data by Lauren Bauer, an economics studies fellow at the Brookings Institution.
This will no doubt remind some people of an old problem that welfare reform was supposed to fix: unmarried mothers who didn’t work because welfare benefits were overly generous and sometimes actually penalized finding a job. One of the great costs of this was that it resulted in children being raised in employment deserts: with fathers absent and mothers jobless, children were growing up without a model of someone working for a living.
Fortunately, that’s not the problem now! Bizarrely, the “alarming” thing that Bloomberg is writing about is married mothers not working because they can depend on their husbands’ incomes.
No. Really. That’s what they are worried about:
Married, college-educated Black moms in particular have seen a decline in participation, likely because they can rely on a partner’s income, according to an analysis of BLS data by economist Rhonda Vonshay Sharpe, founder and president of the Women’s Institute for Science, Equity and Race. Participation among their never-married peers, by contrast, has actually increased in recent months, she found.
In other words, this is not about government downsizing or curtailed DEI practices. It’s largely about women who can rely on their husbands’ income actually doing so. The nightmare scenario!
What could be the problem here? We suppose that a certain style of feminism might regard it as bad for women to rely on their husbands’ income. Apparently, it is better to rely on income provided by a man (or sometimes a woman) you aren’t married to—we call them “the bosses”—than on a spouse. But apart from this zany view, this seems like something that isn’t alarming at all.
The 1980s Unofficially Began 45 Years Ago
On August 12 of 1981, IBM unveiled its personal computer at the Waldorf Hotel. The base model cost $1,565, contained 16 kilobytes of memory, and had no disk drive. Its relatively open architecture, combined with IBM’s decisions to use Intel’s processor and Microsoft’s operating system, created the PC standard—and launched Intel and Microsoft on the path to become behemoths.
The IBM PC Model 5150 with printer introduced to the market in August 1981 at a time when IBM was the world’s largest mainframe computer manufacturer. (SSPL/Getty Images)
The following day, President Ronald Reagan signed the Economic Recovery Tax Act at his California ranch, cutting marginal tax rates, accelerating depreciation, and beginning the supply-side transformation of federal tax policy.
Read the full article here