Moody's Talks - Inside Economics Labor Market Yellow Flags
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Jun 7, 2025 Dante DeAntonio, Senior Director of Economic Research at Moody's Analytics, joins the hosts for a deep dive into the recent jobs report. They unravel the puzzling disconnect between weak job growth and a booming stock market. The conversation highlights alarming downward revisions to payroll numbers, suggesting signs of a recession. They also challenge the narrative around the low unemployment rate, questioning its accuracy amid underlying labor market weaknesses. The potential impact of declining employment on consumer sentiment sparks an engaging debate.
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Labor Market Softness Revealed
- Although May's job growth was slightly above consensus, deep revisions reveal a softer employment landscape.
- Job growth is increasingly concentrated in healthcare and leisure sectors, with government jobs declining significantly.
Revisions Hint at Possible Recession
- Huge downward revisions signal labor market weakness usually seen during recessions.
- The first quarter's revised average monthly job growth dropped markedly from initial estimates.
Unemployment and Labor Force Dynamics
- Unemployment rose from 3.5% to 4.2% mostly last year due to labor force growth.
- Recent soft job growth contrasts with steady unemployment due to shrinking labor force.