Squawk on the Street SOTS 2nd Hour: Jobs Report Takeaways w/Goldman’s Chief Economist, Plus: Tax Bill Winners & Losers 7/3/25
Jul 3, 2025
Jan Hatzius, Chief Economist at Goldman Sachs, delves into the surprising jump in private jobs and how it influences market dynamics. He updates expectations for the Fed’s rate cut, anticipating it could happen as soon as September. The conversation also covers the implications of President Trump’s tax bill on different income groups, revealing significant benefits for higher earners. Additionally, the lifting of export restrictions on China leads to insights on chip stocks and their market performance, showcasing a rapidly evolving economic landscape.
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Jobs Report Mainly Driven by Government Hiring
- The strong jobs report headline was driven mainly by state and local government hiring, particularly teachers, which may reflect seasonal adjustments.
- Private sector job additions were modest, indicating the economy is slowing gradually, not collapsing.
Job Market Health Despite Uncertainty
- The unemployment rate dropped to 4.1% due to fewer people looking for work, not just job growth.
- Despite nervous business surveys, the job market remains healthy with declining jobless claims and ongoing job ads.
Clarity Reduces Uncertainty, Growth Moderate
- Passing the big tax and spending bill will diminish policy uncertainty, which markets dislike.
- Despite clarifying fiscal policy, expected economic growth remains moderate with inflation risks from tariffs.