This is Washington Edition, the newsletter about money, power and politics in the nation’s capital. Today, senior US economy reporter Enda Curran looks at the ramifications of this morning’s jobs report. Sign up here and follow us at @bpolitics. Email our editors here.

Revisions, Revisions

Call it a “no-hire labor market.”

That’s how economists at Morgan Stanley reacted after disappointing employment data released today ignited concerns that the jobs market is looking to be much weaker than expected.

The numbers show that employers added 22,000 jobs in August and the unemployment rate rose to 4.3%, its highest level since 2021. What’s more, revisions to previously released data show that payrolls were negative in June for the first time since December 2020. The youth unemployment rate jumped to 10.5% in August, the highest since late 2016 save for the pandemic period, according to Bloomberg Economics.

Hiring was again driven by the health care industry while sectors such as information, financial activities, the federal government and business services all posted outright declines. Politically hot manufacturing jobs fell by 12,000 and are now down by 78,000 over the year.

The question now: Does the jobs data continue to deteriorate from here or is a bottom in sight?

President Donald Trump and allies were quick to lay the blame at the Federal Reserve’s doorstep for not cutting interest rates by now.

Labor Secretary Lori Chavez-DeRemer said in a statement that “the Fed is failing American workers by dragging its feet and refusing to lower rates.”
 

A commuter in Washington in March. Photographer: Al Drago/Bloomberg

White House economic adviser Kevin Hassett told Fox News that billions in planned corporate investment means “that the jobs will surely come.”

The weak data more or less locks in an interest rate cut by the Fed when policymakers meet on Sept. 16-17.

The challenge will be how deep it can cut during a period of still persistent inflation. New data on prices next week will offer clues as to whether tariffs are starting to flow through to prices more broadly and if services’ costs are also climbing.

The political heat won’t be diminishing anytime soon.

Treasury Secretary Scott Bessent assailed the Fed for putting its own independence at risk through “mission creep” and called for an independent review of the central bank, including its monetary policy.

“At the heart of independence lies credibility and political legitimacy,” Bessent said in an opinion piece in today’s Wall Street Journal. “Both have been jeopardized by the Fed’s expansion beyond its mandate.” — Enda Curran

Don’t Miss

Tesla Inc. offered a new compensation agreement to Chief Executive Officer Elon Musk that’s potentially worth about $1 trillion, a massive package without precedent in corporate America.

Trump signed an executive order to change the name of the Department of Defense to the Department of War, reverting to a moniker not used since the 1940s. That’s in line with his oft-expressed desire to pump up projections of American military might.

Civil service hiring protocols established when Ulysses S. Grant was president will be revised by the Trump administration, allowing managers to select from a broader list of qualified applicants instead of having to choose from the top three scorers on an exam.

Two Venezuelan military aircraft flew over an American naval vessel in international waters off the South American coast, according to the Pentagon, with the US reportedly deploying stealth fighters in response as animosity rose between the two countries. 

Federal agents detained 475 people at Hyundai Motor Co.’s $7.6 billion manufacturing complex in Georgia this week, the largest single-site enforcement operation in the history of the Homeland Security Department’s investigative arm. 

Supreme Court Justice Amy Coney Barrett downplayed Trump’s rebukes of federal judges, telling a New York crowd that presidents have a long history of criticizing the judiciary. The justice, who is promoting her memoir, appeared on stage at Lincoln Center, where she answered questions from Bari Weiss, the conservative journalist and podcaster.

UK Prime Minister Keir Starmer used an emergency cabinet overhaul precipitated by the sudden resignation of Deputy Prime Minister Angela Rayner to try to resuscitate his Labour government, which is flat-lining in public opinion surveys after just 14 months in power.

Watch & Listen

Today on Bloomberg Television’s Balance of Power early edition at 1 p.m., hosts Joe Mathieu and Kriti Gupta interviewed Representative Jason Smith, a Missouri Republican and chairman of the House Ways and Means Committee, on the jobs report.

On the program at 5 p.m., they talk with former Defense Secretary Leon Panetta on global instability.

On the Big Take podcast, Bloomberg’s Sarah Holder talks about her meeting with Housing and Urban Development Secretary Scott Turner and how he plans to confront the housing crisis even as cutbacks have shrunk his department. Listen here on iHeart, Apple Podcasts and Spotify.

Chart of the Day

Over the last three years, the number of part-time jobs in the US has increased by 2.8 million while fewer than 2 million full-time jobs have been added, according to the Bureau of Labor Statistics monthly survey of 60,000 households. On a percentage basis, part-time workers are up by 11% while full-time jobs have increased by about 1%. The household survey is used to measure unemployment, and demographic characteristics of the labor force. Much of the increase in part-time work is because of preference. For instance, many part-time workers have other obligations or are students or are retired and limited in their earnings due to Social Security rules. The share of people employed part time for economic reasons such as slack work conditions or because they couldn’t find full-time work has been relatively steady over the past year. People who hold more than one part-time job are only counted once in the household survey, so the employment growth measure could understate the true escalation. — Alexandre Tanzi

What’s Next

Data on outstanding consumer credit will be reported Monday.

The producer price index for August will be released Sept. 10.

The consumer price index for August will be reported Sept. 11.

Seen Elsewhere

An Ultimate Fighting Championship cage match will be held on the White House South Lawn next June, the Wall Street Journal reports.

A top secret 2019 mission to North Korea by Navy SEALs was swiftly abandoned when a fishing boat interrupted an attempt to plant a listening device intended to intercept high-level communications, according to the New York Times. The civilians aboard the boat were killed, the paper said. 

Argentine prosecutors have accused the daughter of a high-ranking Nazi who fled to South America after World War II of trying to hide a painting, “Portrait of a Lady by Giuseppe Ghislandi,” which had been confiscated from a Dutch-Jewish art collector in 1940, according to the Associated Press. 

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