Who would ever have guessed that chaotically deploying a random set of discredited economic policies for 6 months would disrupt the economy and hurt the labor market…?
The headline NFP number was a disappointing +73,000; that included a decrease in government workers of -10,000. Unemployment ticked up to 4.2% from 4.1% last month. Hourly wages gained a third of a percent.
But the big news is the revisions:
June was revised down by 133,000, from +147,000 to +14,000
May was revised down by 125,000, from +144,000 to +19,000
That makes three consecutive months of sub-100k payroll data.
These are no good, terrible, awful datapoints. If the economy were not so robust heading into the tariff mathem, I’d say these were very recessionary numbers. (Listen to my conversation with Neil Dutta from July for his economic warnings of a recession late 2025/early 2026).
Markets are down 1.5% – 2.5% as I write this. The silver lining is that it increases the odds of rate cuts in September and October.
Data points like today’s NFP explain why I am hopeful that the tariffs will be lifted. Yesterday’s discussion of their legality was two parts legal analysis, one part wishful thinking.
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Light posting next week — I am off to the woods of Maine…
Previously:
Might Tariffs Get “Overturned”? (July 31, 2025)
