Jobs numbers make it all come together: "I have been a bit mystified by the economic data over the last few months. With the combination of tariffs, inappropriate fiscal expansion, immigration crackdowns, and persistently elevated long-term interest rates, why had we not been seeing significant drag on job growth?" asks Josh Barro at Very Serious. Recent jobs numbers have made that less mystifying: July growth was terribly weak, while May and June numbers were revised significantly downward, with 258,000 fewer jobs in those months than first reported by the Labor Department.
"As Jason Furman wrote before these jobs numbers came in, it seemed tariffs were already boosting inflation and dampening growth at the margin, albeit not to a sufficient degree to tip the economy into recession," continues Barro. "Now the jobs numbers are also showing significant weakness, even though they're not yet showing the bottom falling out of the labor market. The last remaining bullish economic indicator is the stock market. Like Furman, I can't explain why stocks are doing so well in spite of everything. But the rest of the economic data appears to be aligning with the idea that the economy is weakening."
Interestingly, something appears to be happening at the Bureau of Labor Statistics:
