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The August jobs numbers were a disaster.

On Friday, the Bureau of Labor Statistics (BLS) reported that the U.S. added only 22,000 jobs in the month of August. To put this into perspective, Wall Street expected job growth of 75,000 for the month. So, this was a massive miss. And it confirms what I’ve been saying for months: that the labor market is beginning to fall apart.

Unfortunately, the reality is much worse than the official numbers claim. Indeed, once we strip the jobs number of the various gimmicks the BLS uses to “smooth over” the data, the economic reality is disastrous.

Two of the largest gimmicks the BLS uses are Seasonal Adjustments and the Birth/ Death Model. Both adjustments serve the same purpose: they aim to “smooth over” or make the data more consistent on a month-to-month basis because the economy doesn’t gain or lose jobs consistently throughout the year.

It’s critical to note that these “jobs” are created in a government spreadsheet, NOT reality. And in the case of the August jobs numbers, these gimmicks masked just how badly the jobs market is doing.

Let’s consider Seasonal Adjustments.

In 2024, Seasonal Adjustments added 4,000 jobs to that year’s August jobs number… but, for whatever reason, in August 2025, this number added 130,000 jobs!

That’s a massive 126,000 difference. And it means that when we strip the data of this gimmick, the reality is that in August 2025 the U.S. LOST 104,000 jobs!

It only gets worse from there.

The Birth/ Death Model is another major adjustment the BLS uses to make the jobs data more consistent. In this case, the purpose of the adjustment is to account for the fact that businesses aren’t created (or fail) consistently throughout the year. So again, this gimmick adds or subtracts jobs in a government spreadsheet to make things appear smoother than economic realities.

Here again, the August 2025 number ADDED more jobs than the August 2024 number.

To wit, in August 2024, the Birth/ Death Model added only 70,000 jobs. But, again for whatever reason, in August 2025, the Birth/ Death Model added 90,000 jobs. So once again, the August 2025 gimmick added “fake jobs” to make the official data look better than reality.

When we strip this gimmick out of the data as well, the U.S. lost 124,000 jobs in August 2025.

This is disastrous… as in RECESSIONARY.

Indeed, if you want a picture of how bad things are REALLY getting in the economy, consider the little-known data point of people who are unemployed for 27 weeks or more.

This metric indicates just how hard it is for someone to get a new job after they’ve lost a previous one. As such, it serves as a great measure of how robust the economy is. And because practically no one pays attention to this data point, it has much less political pressure/ gimmicks applied to make things appear rosier than they really are.

The number of people who are unemployed for 27 weeks or more in the U.S. today is 1.9 million. This is the highest number in FOUR years. And when we account for the total number of unemployed Americans, it indicates that over 25% of individuals who are currently unemployed in the U.S. have been out of work for SIX MONTHS!

(Click on image to enlarge)

H/T Global Market Observer.

The writing on the wall is clear: the jobs market is falling apart. The Fed will now frantically start cutting rates in an effort to play “catch up” but the wheels are rapidly falling off the economy. 

And when you consider that inflation is likely bottoming right as the Fed starts cutting rates, the stage is set for an inflationary storm: a situation in which the economy rolls over right as inflation IGNITES.

Some investments will make absolute fortunes during this time. Most will likely collapse. And those investors who are positioned properly for what’s coming will make out like bandits.

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