Why US hiring hit a wall

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SPEAKER_5 (1:30)

The US economy added 29,000 jobs in the most recent reporting period.

Wall Street and most independent economists, they were projecting 90,000. And right alongside that miss, the unrounded unemployment rate ticked up, settling at 4.2%.

SPEAKER_2 (1:48)

Yeah, and you look at a target like 90,000, and you have to understand that number was already pricing in a severe cooldown.

SPEAKER_5 (1:54)

Right.

SPEAKER_2 (1:55)

Like the consensus was expecting a slow, graceful deceleration. So coming in at roughly a third of that target tells a completely different story. The labor market did not gracefully decelerate. It effectively hit a brick wall.

SPEAKER_5 (2:08)

A total brick wall.

SPEAKER_2 (2:10)

Because when you spread 29,000 jobs across the national workforce of, you know, over 160 million people, you are talking about statistical noise. It is essentially zero growth.

SPEAKER_5 (2:19)

It really is. And that sudden stop is the overarching puzzle inside this data.

Because we track multiple sectors across the economy, and the weakness is incredibly broad.

SPEAKER_2 (2:31)

Yeah, it's everywhere.

SPEAKER_5 (2:32)

The top line number barely registers, and the unemployment rate is creeping upward. The standard framework we use to assess whether an economy is healthy relies entirely on a steady, predictable creation of jobs.

SPEAKER_2 (2:44)

Just to absorb new kids graduating college.

SPEAKER_5 (2:46)

Right, or people re-entering the workforce. When that creation drops to 29,000, the mathematical framework we rely on starts showing serious stress fractures.

SPEAKER_2 (2:56)

Which leaves us with a glaring contradiction. I mean, if hiring basically stalled out to zero, and the data paints a picture of an economy struggling to generate even a baseline level of employment, why did the S&P 500 rally immediately after these numbers were released?

SPEAKER_5 (3:11)

We will definitely get to how Wall Street is processing that, but the first thing you have to understand is that the sluggishness we are seeing now is actually worse than the initial reports suggested.

SPEAKER_2 (3:21)

Oh, absolutely.

SPEAKER_5 (3:22)

The prior growth we thought we had was largely an illusion. The downward revisions to previous data are severe.

SPEAKER_2 (3:29)

Like, historically severe. Yeah.

SPEAKER_5 (3:32)

The two reporting periods prior to this latest one, they were adjusted downward by a combined 60,000 jobs.

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SPEAKER_2 (3:47)

And one of those preceding months was initially reported to the public as a 21,000 job gain.

SPEAKER_5 (3:53)

Right.

SPEAKER_2 (3:54)

It was quietly revised later to a 10,000 job loss. That completely rewrites the historical record of that month.

SPEAKER_4 (4:02)

It really does.

SPEAKER_2 (4:03)

It means the reliance on these initial headlines is structurally flawed. If you run a business or if you sit on the board of a central bank, you are making major financial decisions based on the data in front of you.

SPEAKER_5 (4:13)

Yeah, of course you are.

SPEAKER_2 (4:15)

If that data is consistently revised downward by tens of thousands of jobs, 60 days later, you are making decisions based on a mirage.