Labor market really starting to show some signs of weakness www.wsj.com/economy/jobs…
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— Jacob Weindling (@jakeweindling.bsky.social) July 2, 2025 at 8:17 AM
ADP is not perfect, and it’s normal for jobs numbers to be revised. What is initially reported is almost never the final number once the smaller firms trickle in later on, but it’s notable that non-farm payrolls (NFP), a much more widely-trusted metric that will be released tomorrow, followed ADP’s current downward revision trend the last time ADP reported a net negative private sector jobs figure.
So…FWIW:
ADP June -33,000 is the lowest since March 2023 -53,000
Two days later, NFP in March 2023 initially reported +236,000
Since then, March 2023 NFP revised down to +85,000
— Michael McKee (@mckonomy.bsky.social) July 2, 2025 at 6:44 AM
But as the Wall Street Journal noted today before ADP released their alarming figures that Maria Bartiromo immediately pivoted away from, “the jobs market is weaker than it looks.” The United States is running into a similar aging population problem that plagues Europe, and Trump is accelerating that dynamic. His racist immigration crackdown is reducing the number of people in the workforce, and the largest generation in US history aging into retirement is taking people out of it on the other end. The bar for what constitutes a good jobs report has been lowered as these dynamics “make it harder for the US to add jobs like it did in the past.”
The WSJ points out that from “January through April, the Labor Department has so far revised down the monthly employment gains by an average of 55,000 jobs. March went from a headline of 228,000 jobs added when it was first announced, to 185,000 when it was first revised, to 120,000 when it was revised again.” There is a clear trend this year, backed up by today’s ADP numbers, that smaller firms are really feeling the brunt of Trump’s economy. We don’t see it in a stock market predominantly driven by six companies and one cult, but the weak jobs reports for small firms are becoming too consistent to ignore.
The GOP’s Murder Bill Is Coming for the Economy Too
And now Trump and the Republican Party plan to destroy the largest employer in many rural areas. Stephen Miller and his band of racists who drive policy in the GOP may be gleeful about targeting Black Democratic voters who receive a lot of Medicaid benefits, but so do a lot of rural GOP voters as well. While the headline from Republicans’ attempts to gut Medicaid is that their efforts will result in nearly 12 million people losing their health insurance per the Congressional Budget Office, healthcare is a huge part of the American economy. It accounted for 17.6 percent of GDP in 2023. You simply cannot slash Medicaid this way and not have it hit one of America’s largest employers.
Which is what Republicans are nervous about. Thom Tillis retired and conveniently all of a sudden realized that this bill is specifically designed to nuke the economies of many rural GOP +30 districts that Dems have proven this year they can flip, and he is openly telling Republicans that they will be unambiguously proven as liars in the eyes of their most consistent voters. Sarah Jane Tribble, chief rural correspondent at KFF Health News told NPR that the Senate GOP’s addition of a $25 billion fund to support rural hospitals is only 43 percent of what’s needed to offset the broader Medicaid cuts in their Well, We Are All Going to Die Bill. “And even worse, that rural transformation fund won’t just go to rural hospitals, it’ll go to health clinics and federally qualified health care centers, community mental health and opioid treatment centers, too, by their estimates,” Tribble said. Like its effects on the deficit and the bond market that got America’s credit downgraded, the math on the Republican bill is very straightforward, and its attempt to destroy Medicaid will “cause more hospitals to close.”
KFF notes that “hospitals account for more than 4 percent of all US workers” and that “about one third of community hospitals are in rural areas.” Rural hospitals also have lower operating margins (3.1 percent) than the average of all hospitals (5.2 percent), which helped lead to hospital closures “outpacing openings in rural areas from 2017 to 2023.” In 2022, the American Hospital Association released a report stating that “Rural hospitals are major economic drivers, supporting one in every 12 rural jobs in the U.S. and contributing $220 billion in economic activity in their communities in 2020.” This bill will only exacerbate the already difficult dynamics facing these major employers in GOP districts.
All this performative Republican consternation about their murder bill is rooted in a genuine fear that the obvious economic damage this will wreak on their own voters will blow back on them. They have proven that they don’t care whether their constituents live or die, but jobs are the chief currency in American politics, and Republicans are acutely aware of how this is a jobs killing bill in rural areas, demonstrated by Josh Hawley and Lisa Murkowski saying they are pushing to change the Medicaid cuts in the bill they voted for.
[stabs you] I will do everything in my power to reverse future stabbings
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— Hamilton Nolan (@hamiltonnolan.bsky.social) July 1, 2025 at 1:26 PM
That Republicans are continuing to push forward with this murder bill proves how much contempt they have for their own voters and their steadfast belief that their propaganda can usurp our economic reality. History proves otherwise, as another unhinged and lawless Republican administration tried this deluded strategy of lies earlier this century and it turned North Carolina and Indiana blue.
So What Now?
Taking a step back and looking at the first near-six months of Trump’s economy is sobering. The dollar is off to its worst start since 1973, as investors are fleeing the United States to a degree they never have before due to a new risk premium placed on all US assets, leading to nervy headlines like “European junk bond sales hit record as investors cut US exposure.” Growth projections across the world are being revised downward, with jobs reports following, especially for smaller companies. Trump’s tariffs are more onerous on smaller firms, and should this trade war endure through the second half of the year, there’s no reason to think that hiring will pick back up and every reason to think that it will continue to decline. Add in the murder bill killing businesses that support nearly eight percent of rural jobs, plus Trump’s racist deportation regime that he even admits has catastrophic economic effects, and there are serious economic headwinds everywhere you look.
An economic crash is unpredictable by its very nature, but the outline of one is emerging. The bond market has sent a clear message to the Republican Party that its plan to just lie about exploding the deficit in the murder bill has no purchase in the largest, most liquid market in the world. Should the bond market go haywire as it has threatened to do multiple times this year to create the TACO Trump meme, it would bring the rest of the financial world down with it. The stock market’s wealth effect is responsible for a significant amount of our economic growth right now, and with it sitting at all-time highs amid slowing jobs reports, the conditions for it to have a serious panic are in place. This divergence between bond market jitters and stock market euphoria must be resolved at some point, and if the jitters win out, all hell could break loose in asset markets pricing in economic growth that simply is not there right now.
Bond yields are up again today, which is the exact opposite dynamic you want in a slowing economy. It makes borrowing more expensive and makes it even less likely that firms will make long-term capital expenditures in America like Trump wants. There are very few economic tailwinds in the market right now outside the budding concentration camp industry dominated by GEO Group and CoreCivic getting a world-historic handout in the GOP’s murder bill. White nationalist politics has deleterious economic effects, as Stephen Miller’s desperate attempt to make everyone in America look like him is taking our economy down with it so far this year.
Deloitte released a baseline economic forecast, as well as surprises to the upside and downside based largely on how Trump’s trade war shakes out. Their baseline expectation is in line with the World Bank’s newly revised downward estimate of 2025 US GDP at a tepid 1.4 percent, well below last year’s figure of 2.4 percent. Their downside surprise seems far likelier than their upside surprise that Trump will bring the tariff rate on USMCA signatories back down to 3 percent, as they assume 75 percent tariffs on China and 25 percent on Canada, Mexico and the EU should Trump ramp tariffs back up again.
Given that Trump just called off negotiations with Canada before his trade adviser said they were back on, it’s not unreasonable to apply more weight to their downside surprise becoming more realistic by the day per president deals’ own posts. In this downside scenario, Deloitte assumes “that the bond market reacts to the higher tariffs and the passage of the budget bill, sending the yield on the 10-year treasury above 5 percent in the fourth quarter of 2025. This forces the US government into an austerity trap where cuts to spending and higher tax rates are required to bring the interest rate on government bonds back down.” I know economic language can be very dry sometimes, but this is a harrowing projection. Trap is the correct word for an economic world that Trump’s id wants to bring into reality.
Deloitte’s downside surprise echoes the larger fears the Fed has voiced about Trump’s stagflationary policies and which high-level traders placed bets on last year, where economic growth slows but tariffs and alarming deficits push inflation and interest rates up while unemployment rises, a set of conditions that was once thought to be impossible. This is what happened in the 1970s, and it took the entire decade to dig out of this economic malaise. Trump is threatening to fire Fed Chair Jerome Powell unless he repeats the core fiscal policy mistakes of the 70s, and it seems increasingly likely that Trump’s economy will look a lot like this era of our history where the US Misery Index reached all-time highs.
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