by drudolph914 | 2025-09-05 19:54:22+00:00
there is a lot of half correct and half in-correct information in this thread. it might be worth reading some of the articles im linking

the high-level facts are

1.) unemployment and number of available jobs is bad right now, and inflation never got back down to 2% after covid. So Powell made the announcement to lower interest rates. this effect will raise inflation, but create more jobs - which is the correct and more important thing to focus on right now

on top of this, tariffs are making things worse for the average american. based on what powell is saying, the current estimates claim the tariff's alongside the planned increase in inflation will lead to about a 20% increase in prices for the average consumer, but this one time 20% increase is better than having no jobs!

2.) the government has been overestimating the amount of available jobs for 10+ years. A large part of why this is happening is because of the gig economy

an example of what I mean is if you sign up to be an uber driver, uber registers you, the driver, as its own company with US government. this kind of thing is fine for uber, but the government doesn't count you becoming an uber driver as 1 new job - they were counting it as roughly 7 newly available jobs. this is because each new company created in the US roughly brings on 7 employees. larger private financial institutions were correcting for this, but the department of labor statistics hasn't corrected for this. this means banks and private institutions have had better data than the government on the job market for years and were calculating that in to the stock market

3.) to add another layer of confusion, the government calculates the unemployment rate by counting the number of US citizens that file for unemployment checks, but many people found it easier/faster to get a gig economy job in between full time jobs - rather than waiting a 1+ month(s) to get on unemployment checks. this means that the number of people who are unemployed is way higher/worse than what the government is reporting. what this means is that method used to count available jobs AND unemployment are wildly wrong - there are less available jobs and more people unemployed by about 5-7x what was reported this summer.

On top of that, if you look at states where there are stricter/more requirements to become an uber driver, it actually shows the unemployment rate in those states is much higher than expected. the avg unemployment rate amongst these states are probably more accurate to how bad the unemployment situation is in the US overall

4.) the current US administration has fired a lot of employees, which has led to even worse labor statistics/estimates compared to previous years

5.) trump specifically has actually caused a lot of confusion for the average person trying to understand this year's US economic status because we use to have quarterly checkins in June, but as of the past 2 years we've been doing it in July. The way the government tracks important economic indicators starts with the US gov announcing their initial stats, but these numbers often over estimate; so the US gov will often have a large correction the following month

trump this year has been making claims like, "this is the best GDP we've seen in July of recent years!" but of course it's the best because he is intentionally doing the comparison wrong

to ELI5 what I mean, June 2024 had the over estimates stats and the US government would correct them in July 2024. but now in 2025, July is the month with over estimate, and August will be the month we correct the estimates

what we should be doing is comparing august 2025's GDP with July of 2024's GDP. doing so would show you that GDP is not better, but essentially stagnant

trump and his administration are intentionally not doing the comparison correctly for better sounding headlines

[0] dept of labor statistic report- https://www.bls.gov/news.release/pdf/empsit.pdf

[1] Deep Dive: The US Jobs Market Is Much Weaker Than it Appears - https://www.financialsense.com/blog/20854/deep-dive-us-jobs-...

EDIT - typos