A deeper look at US labor market trends may be showing a greater cooling of the US economy than appears on the surface. While monthly payroll reports and the 4.2% unemployment rate seem to be resilient, Garrett Melson, Portfolio Strategist, Natixis Investment Managers Solutions, warns that such resiliency may be overstated. “The root of the problem is a labor market in stasis with hiring, quits, and layoffs at depressed levels. With momentum at a standstill, it doesn’t take much in the way of layoffs to push the unemployment rate higher,” said Melson. The Beveridge Curve, which shows the relationship between labor demand – in the form of job openings and the unemployment rate – is showing signs of concern, too.
May 21, 2025