The labor market is sending false signals
2025-07-03 19:53:17
Main Idea
The latest jobs report shows mixed signals in the labor market, with strong headline numbers but underlying weaknesses in private payrolls and jobless claims.
Key Points
1. Non-farm payrolls came in at 147k, significantly above consensus estimates of 100k.
2. The unemployment rate dropped to 4.1%, below forecasts of an increase to 4.3%, suggesting a stronger labor market than the FOMC's June projections.
3. Private payrolls were weaker at 74k, below expectations of 105k, indicating underlying softness in the labor market.
4. Continuing jobless claims are rising weekly, reflecting difficulties in finding new jobs and potential fragility in the labor market.
5. The strong unemployment rate likely eliminates the possibility of a July rate cut by the Fed.
Description
Immigration changes are papering over a fragile labor market
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