Global Macro Research
ตลาดแรงงานWhat do our US labour market indicators say about the state of the cycle?
Data on the US jobs market are sending conflicting signals. So, we have built some composite indicators to measure its health. While the headline measure is below its long run average, the index has stabilised and we see nascent signs of recovery. This suggests the Fed’s three “insurance cuts” in 2025 sufficiently reduced downside risks, and we expect the Fed to pause cuts until the next chair takes office in May.
Author
Jon Butcher
Senior US Economist
ระยะเวลา: 1 นาที
วันที่: 17 ก.พ. 2569
Key Takeaways
- US economic data have diverged recently. GDP growth in H2 2025 was very strong, but employment data softened.
- The labour market deterioration has not triggered the Sahm rule, and the rise in unemployment partly reflects higher participation. Indeed, the combination of strong GDP and weak employment means US productivity growth is surging.
- Given these conflicting signals, we developed a series of composite labour market indicators to cut through the noise.
- The headline indicator is below its long-run average, driven by weak demand and dynamism, as elevated trade uncertainty has held back hiring.
- But the indicator has recovered from its lows, suggesting the Fed’s three “insurance cuts” have headed off downside risks, and we see early signs of recovery, supported by reduced uncertainty.
This is consistent with our expectation that policy is on hold until a new Fed chair takes office. But the recovery is fragile, and the possibility of geopolitical uncertainty spiking means risks are perhaps skewed to the downside, prompting earlier Fed action.
