US labor market faces structural consumer-led slowdown
The speakers argued that the headline BLS establishment survey strength is an outlier contradicted by a deteriorating household survey, falling small business hiring plans, and a consumer squeezed by high energy costs.
The argument
The hosts pointed to the household survey losing 300,000 positions since January and full-time jobs dropping by half a million, suggesting that businesses are actively cutting labor costs as tax refund cushions dry up. They argued that retail giants and dollar stores are already reporting a significant pullback in discretionary spending, signaling that the labor market is the next shoe to drop.
The thesis, stress-tested
✓ What validates it
- ✓A downward turn in upcoming nominal retail sales data
- ✓Continued declines in full-time employment within the household survey
- ✓An increase in planned layoffs in Challenger, Gray & Christmas reports
▸ Risks discussed
- ▸A sharp decline in energy prices could relieve consumer pressure
- ▸Resilient nominal retail sales could delay the labor market downturn
Hear it yourself
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