Hi HODLers,
Hiring slowed down and looks increasingly negative. US only added 22,000 jobs in August while some previous numbers such as the June Non-Farm payroll number was revised down to a LOSS of 13,000 jobs.
There are many reasons for that. Crackdown on immigration, older population, slowing economy as well as DOGE cuts into government workforce.
Nevertheless, as we keep hearing it from multiple sources, finding a job has become increasingly difficult and then trend is not getting any better...
Unemployment rate ticked up to 4.3%
Nothing to crazy right now but it should continue to creep up in the coming months.
DOGE Cuts have produced results
Some quite worrying signs when digging into the numbers:
- Private sector added 38,000 jobs in August mostly due to a gain of 46,800 jobs in healthcare and social assistance. In August, US lost 12,000 manufacturing jobs
- The % of unemployed people who have been unemployed for 27 weeks or longer rose to 25.7% (the highest since February 2022). Reflecting how it has gotten harder for people to get back in the workforce
- Black unemployment rose to 7.5% from 7.2%. Highest level since October 2021
Hot Take
Even if I was expecting such weak numbers, it really seems like the American exceptionalism is coming to an end. I also believe the tariff disturbance is finally showing up and we did not even see half the impact on the inflation front...
If we have weak growth AND elevated inflation (around 3%+), this is a recipe for disaster as Stagflation can last years... I hope I am wrong but despite the upcoming cuts, I believe the FED is kind of stuck as it needs to battle the slowing economy and the increasing inflation.
In my opinion, cuts are confirmed for September even if inflation ticks up. Taht might be good for Real Estate, Crypto and Stocks but let's face it. The gloomy economic environment might overshadow the increased liquidity.
What do you tink?
Stay safe out there,
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