Moody's Talks - Inside Economics A Jobs Recession
Sep 5, 2025
Dante DeAntonio, Senior Director of Economic Research at Moody's Analytics, dives into the recent August employment data, revealing the economy may be in a jobs recession. The conversation highlights weak job growth, particularly affecting young workers aged 20 to 24. Dante shares insights on how pivotal sectors like healthcare are faring while others stagnate. They discuss rising wages amidst a fragile job market and ponder how these trends might influence Federal Reserve interest rate policies as expectations shift dramatically.
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Payroll Growth Has Flattened
- Payroll job growth has slowed dramatically with only 22,000 jobs added in August and three-month average near 29,000.
- Employment gains are concentrated in healthcare and leisure while most industries show weakness.
Diffusion Index Signals Narrow Gains
- The three-month diffusion index has stayed below 50 for five months, unprecedented outside recessions.
- This signals very narrow industry participation in job gains and raises recession risk.
Jobs Needed To Stabilize Unemployment
- Break-even job growth (jobs needed to keep unemployment stable) is higher than current underlying growth.
- Panel estimates underlying growth ~25–50k and break-even around 50k, implying unemployment pressure.