Hiring in America Slows Way Down
Photo by Ernie Journeys on Unsplash
In three of the last four months of data, the monthly change in private sector employment has declined—significantly in the last two. After today’s figures came out, Trump freaked out at Fed Chair Jerome Powell on Truth Social, writing “ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE.” While Trump and every other noob buying meme coins and meme stocks on Wall Street thinks Jerome Powell runs the world, he does not, and Trump’s problem is the bond market pushing interest rates higher in the last couple of months. I wonder if anything significant happened to the economy over that period of time!
The ADP National Employment Report revealed that just 37,000 private sector jobs were created in May, falling well short of the 110,000 jobs expected by economists who were polled by the Wall Street Journal. It was the weakest monthly growth figure for the private sector in over two years.
Despite the modern phenomenon of noobs insisting on one man and not a $29 trillion market dictating the price of money, there were signs outside both bonds and the Fed that this was coming. Here’s the opening lede from a May 4th article in the Wall Street Journal: “Major U.S. employers are starting to take a new approach to jobs: Hire less—or not at all.” As much as Trump would like this WSJ report to be about businesses fearing the mighty Fed Chair’s overwhelming 4.33 percent Fed Funds Rate, companies-hiring-trends-tariffs in the URL gives you a pretty good idea of why these employers are innovating new ways to depress job reports.
“We have instituted our recessionary playbook” said Robert Mack, chief financial officer of Polaris, in an investor call last month. Walmart’s CEO said they would start raising prices in June due to the impact of the tariffs. These are just a couple examples of many large employers pulling back to some degree in the face of these tariffs. What we are seeing in America’s hiring slowdown is the direct effect of Trump adding a surcharge to every import that Americans pay for.
Ever since liberation day, more CEOs have been using that dreaded P-word: pausing. Trump’s own custom officials are having a hard time figuring out how exactly to impose this zigzagging effort to remake the global economy to a larger degree than the Smoot-Hawley tariffs which exacerbated the Great Depression, so it stands to reason that businesses will hold off on major decisions until they can figure out what the fuck is going on. Exacerbating this problem is that more and more data suggests the answer is that dreaded S-word which was once thought to be impossible.
#Stagflation 🇺🇸