Bloomberg Surveillance Key Jobs Reading and Tariff Rates Unveiled
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Aug 1, 2025 Michael Darda, Chief Economist at Roth Capital, delves into the latest jobs report, analyzing its implications for market trends. Ernie Tedeschi, Director of Economics at the Yale Budget Lab, provides critical insights on rising US tariffs, revealing that average rates could hit 15.2%. The duo examines how these tariffs affect job market dynamics and consumer prices, along with the Federal Reserve's response to shifting economic indicators. Their discussion sheds light on the intertwining of global trade policies and domestic employment opportunities.
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Labor Demand Versus Supply Dynamics
- Payroll numbers show labor demand is slowing but labor supply is also shrinking due to less immigration and an aging workforce.
- The Fed focuses on weakening labor demand, not structural labor supply changes.
GDP Growth and Unemployment Insights
- Nominal GDP growth around 4% is a non-inflationary environment, showing supply shocks dampen real growth.
- The unemployment rate remains flat, indicating no recession despite payroll revisions.
Fed Focus on Unemployment Rate
- The Fed is expected to focus on the unemployment rate when considering policy moves.
- Futures markets price about 90 basis points of rate cuts over the next 12 months, timing is key.
