The employment report is even weaker than it seems, shows a chilling economy in Trump's trade war

OIn appearance, the jobs report published in August by the Bureau of Labor Statistics does not seem too bad for the economy. The economy has created 130,000 jobs, but has not reached the 150,000 mark expected by economists. Unemployment is stable at an excellent 3.7%. But the hidden numbers hide key details that indicate a fragile economy.

On the one hand, 25,000 of these 130,000 jobs are temporary jobs created by the government for the sole purpose of the 2020 census. On the other hand, the BLS has revised downward the gains of employment reported in the already mediocre jobs of June and July, with an accumulation of 20,000 jobs. Nevertheless, average job gains over the past three months are 156,000 per month, which means that the month of August has been a slight but some decline.

There is very good news under the surface, of course. The most important measure indicates that, although the industry may be frightened by President Trump's trade war, we are probably not about to experience a serious recession. The BLS found that annual wage growth was up 3.2%, exceeding expectations, and significantly, hours worked by all employees, including manufacturing workers, had increased slightly. Manufacturers still hired 3,000 workers. Improved wage growth and increases in hours worked are likely to dissipate pressure from the Federal Reserve to adopt a further rate cut. That may irritate the president, but given the historically low rate of federal funding that leaves us without our main monetary tool to kick start the economy in the event of a recession, this is good news for the economy.

But here's the result: if the Census Bureau does not add temporary solicitors and given the persistent sluggishness of jobs in key economic sectors, including retailers, transportation and warehousing, this job report would be worse than low. All else being equal, job growth in 2019 will be the worst since 2010, as Trump increases the number of people employed by the government.

This is largely out of Trump's control, although his substitutes will likely use this report to try to persuade the Fed to cut rates and turn such a low ratio into a victory. But the BLS continues to confirm what we all already know: Trump's trade war is about playing with an economy that is already in danger of sinking into recession.