We have entered phase when drop in supply of workers holding down unemployment even as pace of private sector job gains weak. That is not ideal as pockets of labor shortages emerging, despite it being harder to find a job in labor market. New entrants not doing great.

…inflation. A slight chill under the hood. Private sector payrolls only 115K. Federal government shed 7K, mostly retirement amidst hiring freezes. Headline keeps heat off Fed to cut, even thought they would have cut by now absent tariff threats.

…that incomes were boosted via transfer payments - largely to long-term unemployed. Unemployment rate for whites edged lower, Black moved up. Wages edged up 0.2%, and cooled to 3.7% Y/Y and hours worked in week edged down. That leaves less of a margin above move up….

The unemployment rate dropped to 4.1% but for the wrong reasons. The labor force continued to shrink, while those turnover further stalled, suggesting fewer opportunities to job hop. Harder to find a job if don’t have a job via the long-term unemployed. Notable….

Payroll employment surprised nicely on the upside with 147K in June with upward revisions to previous months. The Big 3 - healthcare & social assistance, leisure & hospitality & state & local - continued to drive gains since June 2023.

Would not take much of to tip the apple cart with a rise in layoffs. A slow increase in unemployment is expected. The pace of the rise will be blunted by the drop in supply of worker via immigration policies.

…into 2025. Many of those took advantage of the de minimus clause, which allowed them to escape tariffs for imports less than $800. That was eliminated in May. The things I worry about is the narrow margin for error we have give low pace of hiring and quits.

Losses in the smallest firms were largest - less than 20 workers. Those firms are hard for the official survey by the federal government to capture until revisions as they are only estimates first time around. Retail had the largest surge in new biz formations in 2024 &.

Heathcare has been the largest driver of employment gains for some time. This is a sector hit by funding freezes & loss of immigrant labor. Manufacturing added jobs. There was a rush to related to pause on most prohibitive tariffs against .China. Unclear how long can persist.

…are taking a toll, esp on new entrants into the labor force are struggling. Hiring freezes are taking a toll even though layoffs remain low. The losses were largest in Professional business services, health and education. Funding freezes are playing a role.

ADP payrolls dip 33K. The payroll data by ADP was revised several years ago. It no longer is meant to predict the official payroll survey that we see at the national level but does add valuable color to our read of the labor market. Hiring freezes and….

RT @BudgetModel: We estimate the Senate-passed reconciliation bill increases primary deficits by $3.1 trillion over 10 years. The dynamic c….

It just doesn’t rise fast enough for to be considered an “official” recession. 2026 looks better as long as the Fed can begin rate cuts to provide an additional lift to activity. That said, if it walks like a 🦆& quacks like a 🦆, it’s a 🦆. Could be bumpy second half 2025.

That is hard as it could create a floor under Treasury bond yields - the compensation needed for investors to lend us long. We still see the economy averting a recession but growth is below potential and that will nudge the unemployment rate higher.

Hard not to enter the second half with headwinds. The deficit financed tax & spending package will initially stimulate the economy, but at a price. We have given up thinking about deficits, which makes buyers of our debt more skittish about lending long to us than in the past.

. has consequences for all in the community, not just scientists. That is prior to the unique role that government & university research has played in spurring innovation and breakthroughs that save lives. I am a beneficiary of those breakthroughs surviving cancer.

. of federal employment cuts could top 1.2M total jobs due to spillover effects. That is prior to grant freezes and contract cancellations. Historically, hospitals & research universities were the largest employers in a community. Reversing course on those gains….

The challenge is that those shifts will be occurring, even as the cumulative effects of earlier curbs on federal employment & grant freezes hit the ecosystems of some of economies across the country. The @AtlantaFed has estimated that the collateral damage….

Even if tariffs do not go up from here - more are in the pipeline - the on again off again front running borrows from growth in the second half.

in May and June, but gains will be short-lived. The disruptions to supply chains are similar but not as bad as the pandemic, while consumer have less cushion to blunt blow of higher prices.