tl;dr
JPMorgan Chase warns of emerging weaknesses in the US economy despite positive headlines. JPMorgan's chief global strategist David Kelly highlights that job gains for March and April were revised down, and May saw a loss of hundreds of thousands of jobs according to the Household Survey. The average...
JPMorgan Chase has issued a cautionary alert about emerging weaknesses in the US economy, despite encouraging headline job numbers. Their chief global strategist, David Kelly, emphasized that revisions by the Labor Department for March and April job gains have been downgraded, and the Household Survey indicates a loss of hundreds of thousands of jobs in May.
These revisions bring the average monthly job growth for the first five months of the year down to 124,000, notably lower than last year's average of 168,000. Kelly suggests this points to a gradual economic slowdown that isn’t immediately apparent when focusing solely on headline payroll statistics.
Furthermore, data from PNC Bank highlights a significant drop in labor force participation, with 625,000 fewer adults working or seeking employment in May. This decline suggests that many potential workers may be discouraged from entering the labor market, reflecting deeper economic challenges under the surface.
Despite the US adding 139,000 jobs in May and maintaining a stable unemployment rate of 4.2%, these underlying indicators reveal that the economy may be losing momentum. The initial optimism masks a broader and gradual slowdown spreading across multiple sectors, demanding closer scrutiny beyond surface-level employment figures.