
The job report that made an amazing call for Wall Street wake up on Friday also contained a recession signal and more indications that AI weighs employment.
Salaries rose by only 73,000 last monthfar below the predictions of about 100,000. Meanwhile, the May May decreased from 144,000 to 19,000, and the total June was reduced from 147,000 to only 14,000, which means that the average profit over the past three months is now only 35,000.
To be sure, the weak numbers of jobs do not mean that there are mass layoffs. Other databases such as weekly claims for unemployed and monthly research research are returned. At the same time, wages and working hours are still growing.
“But the comfort of this news is dominated by a sharp employment stall, sending a warning to the speed of the stand,” JPMorgan Economists wrote in the note late on Friday.
In particular, engaging in the private sector has slowed on an average of 52,000 in the last three months, with sectors being stagnated outside health and education.
Combined with a lack of any signs that unwanted separations are increasing as a result of immigration policy, this is a strong signal that business demand for labor has cooled down, they explained.
“We have repeatedly emphasized that the slide in labor demand of this size is a recession warning signal,” Jpmorgan added. “Companies usually maintain employment gains by lowering the growth they consider transitional. In episodes when labor demand slips by lowering growth, it is often the forerunner of withdrawal.”
For the time being, the overall economic numbers still show expansion, though at a slower pace. GDP withdraws firmly than expected in the second quarter, reaching 3%, though metrics that take away the influence of foreign trade and instead of final domestic demand indicates a slowdown. And for the third quarter, GDP -Tracker of Atlanta Fed Points of growth slowdown at 2.1%.
JPMorgan also warned that the depressive pace of job growth is unlikely to withstand income or consumer confidence that has withdrawn in recent months.
Meanwhile, the wider U-6 unemployment gauge involved people who did not recently searched for a job but are still interested in finding work, as well as people who are reluctant to work part-time and prefer a full-time role-climbing 0.4 percentage points this year.
In contrast, the main unemployment rate has barely changed, jumping into a narrow range between 4% and 4.2% more than a year.
Until Friday’s shock, it helped to give the impression that the labor market was elastic in the face of President Donald Trump’s steep tariffs.
“We think that creating jobs is no longer properly described as solid,” JPMorgan said. “Together with the construction of the trade war, this week the news supports our view that the Fed is approaching relief.”
A special note from JPMorgan has also highlighted more details buried in the job report, which suggest that AI has an impact on the labor market.
For example, payrolls in professional and business companies are in trend lower and dropped by 14,000 last month.
In addition, the unemployment rate of college -educated workers rose to 2.7% from 2.5%, while the total unemployment rate reached 4.2% from 4.1%.
“It seems that the new participants participated with an unusually large part of the rise in the unemployed last month,” Jpmorgan said.
That follows earlier alarms for the use of AI reducing the need for jobs at the entrance levelCritical stone for recent college graduates seeking to start their careers.
But last month, top economist Brad Delong aroused in a recent essay that the challenges that young job seekers face today Primarily driven by widespread uncertainty in politics and a weak economy– Not with the rapid rise in your tools.
The uncertainty is causing companies to postpone major decisions, including employment, in conditions of unpredictable policy environment, which is executed by Trump, again, a cross -trade war.
“This risk aversion is particularly harmful to those at the beginning of their careers, who rely on a constant flow of entrance vents to get a leg on the door,” he wrote.
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