The stagnant American jobs market reflects the pressure American small businesses are facing from high interest rates that are around two percentage points above those of other industrialized nations.
Friday’s jobs report shows job creation has been essentially flat over the summer. The U6 unemployment rate, a broader measure that many economists consider the real unemployment rate, exceeded 8% for the first time since the Obama administration and its immediate aftermath (not counting the Covid period).
When small businesses, which create nearly two-thirds of new jobs, can’t access credit, they can’t invest back into their businesses. As a result, job creation suffers. The outplacement firm Challenger, Gray & Christmas reported significant layoffs so far in 2025. And Wednesday’s JOLTS report revealed there are now more unemployed Americans than available jobs for the first time since (again) the Obama administration and its immediate aftermath (not counting the Covid period).
The Federal Reserve should respond by cutting rates by a minimum of half a point at its meeting this month, as President Trump has long said. If the Fed had listened to Trump, summer job creation would have been much stronger. Yet instead of being data-dependent, Fed Chairman Jerome Powell has been a data denier. A rate cut this month is almost a certainty, but “Too Late” Powell was indeed too late.
That said, the labor market is stronger than the topline numbers suggest. Wages are growing faster than inflation, allowing workers to finally get ahead, a stark change from the Biden administration. The household survey showed solid seasonally adjusted job creation. And unproductive federal government jobs continue to decline. The Trump administration has now shed 100,000 federal government jobs (not including those receiving severance or long-term leave).
Lower interest rates and the new tax cuts coming online will significantly strengthen the labor market in the months ahead. New Job Creators Network polling finds that nearly all small businesses plan to take advantage of the tax cuts in the Big Beautiful Bill that was signed into law on Independence Day, boosting job creation and wages.
For example, HM Manufacturing in Illinois is purchasing $645,000 worth of new equipment in response to the tax cuts and hiring five new team members to help manage it. Sergio’s Restaurants in Miami is expanding by two new locations and hiring 100 additional workers over the next year due to its savings.
Big businesses are also investing. Johnson & Johnson announced a $2 billion investment at its North Carolina facility, crediting the Big Beautiful Bill. Hyundai said it is boosting U.S. investment by $26 billion. And GE Appliances revealed a $3 billion investment that will create 1,000 jobs across five states.
Trump’s efforts to reduce crime in big Democrat cities can also produce a job creation tailwind by allowing more entrepreneurs to finally live the American Dream, without fear for their safety. Minority small businesses are the biggest victims of the endless out-of-control crime and public disorder in cities like Chicago. Crime-free neighborhoods are the real economic justice issue, and Trump is right to stand up for minority small businesses looking to invest in their businesses.
It was a cruel summer for job creation, but lower interest rates and tax cuts will bring a welcome harvest in the fall.
Alfredo Ortiz is CEO of Job Creators Network, author of “The Real Race Revolutionaries,” and co-host of the Main Street Matters podcast.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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