It’s jobs week in America. Who’s excited?!
Nobody. Nobody’s excited. Because it’s the first week of August, which means anyone who matters is on vacation. If you matter and you’re not on a vacation, you’re surely just back from one, planning one soon or, quite possibly, both.
A corollary says anyone who’s not on vacation, just back or packing is spitefully disinterested. It’s a paradox: “I’ll care about the July jobs report when I’m senior enough that I’m not required to care about it.”
For what it’s worth, consensus expects 85,000 from this Friday’s update on US hiring. That’d be an improvement from June’s disappointing pace.
Naively assuming no revisions, an as-expected readout would pull the three-month moving average back below 100,000.
Recall that June’s underwhelming BLS release raised more questions than it answered. Leisure and hospitality “inexplicably” shed the most jobs since 2020 and the prime-age participation rate plunged 0.6ppt, tied for the largest decline ever in data back to 1948 excluding the pandemic.
I’d look for both of those metrics to recover in July’s release, but… well, suffice to say sundry anomalies from the June report didn’t do much to bolster the BLS’s tarnished reputation. The July report really needs to be free of “WTF” prints, if you’ll pardon the implicit profanity, and it’d be nice if the accompanying revisions aren’t so pronounced as to render the prior two months’ headlines unrecognizable.
In the event the data admits of more pronounced discrepancies, “Task Force Kevin” will be emboldened in his crusade to find a “better” way to measure crucial US macro aggregates.
The unemployment rate’s seen steady at 4.2%, quite low and subject to upside risk. “[N]oise in the participation rate has anchored the UNR lower, a dynamic we’re wary could reverse in the near-term,” BMO’s US rates team remarked. A meaningful uptick in the jobless rate — which is to say an increase that can’t be explained away by “seasonal noise” in participation, as BMO put it — could at least help stabilize an unruly long bond.
Speaking of Treasurys, the borrowing estimate and quarterly refunding announcement are due this week. Scott Bessent should write himself a note: This is an inopportune time to telegraph coupon auction size increases. The last thing an antsy long-end needs is a rerun of the August 2023 oversupply scare.
Ahead of the NFP release, markets will get the usual US labor market appetizers. Tuesday’s JOLTS update will probably show job openings were mostly unchanged on the last business day of June (the last JOLTS release found the so-called “jobs-to-jobless” ratio rising to 1.039, the highest since January of 2025). On Wednesday, ADP private hiring’s seen printing 70,000 for July (down from 98,000 the prior month). And Thursday’s Challenger release will likely reflect more AI job replacement.
The figure above’s a reminder: AI was blamed for nearly 102,000 job cuts during the first half of 2026, or almost a quarter of all YTD layoffs.
Also on deck this week in the US: ISM manufacturing and services (seen printing in expansion territory together for a seventh consecutive month with all eyes on the price and employment subindexes, as usual), the preliminary estimate of productivity and unit labor costs for Q2 (which’ll receive more attention than usual in the context of Kevin Warsh’s insistence that we can make policy today based on tomorrow’s anticipated productivity renaissance) and a smattering of third-tier releases.
On the geopolitical front, Donald Trump may or may not go ahead with a renewed round of bombing in Iran. The Pentagon was all set to pull the trigger over the weekend before Trump had second thoughts. He offered the usual explanation. “We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to,” Trump wrote on social media. I think he meant “parameters.” Either way, it should’ve been “have,” not “has.”
I’m struggling to keep up with the deal lingo. Is “the perimeters of a deal” a milestone closer or farther from a deal than “a concept of a deal”?
he has the perimeters of the parameters of a concept of a plan for a deal… it’s art.
This is good.
I imagine a Captain Planet style montage.
“We can’t stop this inflation! Let’s unite our powers.”
“Communications!
“Balance Sheet!
“Data!
“Productivity and Jobs!
“Inflation Frameworks!”
Then Captain ‘Flation played by Kevin Warsh in a neon green spandex body suit appears and defeats the inflation by cutting rates.
Just curious will this pivotal from inflation fighting under Warsh add more fireworks to DSA movement?
Less than a MOU, less than “these are great guys, much better than all those I slaughtered,” more like “how the hell am I going to escape this one? Maybe bring up Jeffrey?”….
To me the disturbing thing about the job market is the absence of churn. It is making it hard for young folks and laid off employees. It is a tell. When the economy takes a dip, unemployment will go straight up. I don’t know when or how but it is in the pipeline. My guess is a dose of stranded assets leading to a credit contraction. AI related spending would be my guess. But who knows?
Is the war drama engineered to result in maximum truth social reciepts? It would be intellectually interesting to see a comparison of truth social receipts with the likely stock market gambling. However I cannot say that I would understand how to use that analysis to profit.
One might hope that Warsh’s task force will try to find facts that will lead to economic policy. Unfortunately, odds are that economic policy has already been determined and the task force will create the “facts” to support it.
On a secondary note, if AI is going to deliver the returns that stock prices demand it will have to use its super powers to build itself efficiently such as solving its water and energy demands on a global scale. If it can’t, then it’s not worth the chips it’s printed on and will never generate the required ROI.
On a global scale, humanity doesn’t need another business that helps it cook itself in its own juices. Perhaps a stroke of the golden executive order pen is all that’s needed to change AI to BI. Who can really get excited about much of anything artificial. On the other hand, who doesn’t want better.
If nuclear energy for peaceful purposes is ever going to deliver on its potential, the time is now. AI, I’m talking to you. With your humongus brain, solving the fusion problem or the miniaturization of fission reactions should be child’s play. Stop hacking your playmates and get to work.