The "K-shape" economy is back. To me, this is one of the most important charts to understand the 2025 economy... The wealthy are still spending (though there has been some moderation). Meanwhile the bottom 80% are tapped out. Their spending is basically in line w/inflation. ***Whether we go into a recession will depend almost entirely on whether the top 10 to 20% of earners keep spending*** #economy

The US labor market is weakening. Is that due to lower supply or lower demand? Smart piece from @Claudia_Sahm who concludes: "Currently, the data suggest that reduced labor supply is likely the key driver though reduced demand is playing a role and the risk of cyclical weakening in the labor market have risen." #jobs #economy

What a chart. Look at the big jump in delinquent student loans. **Over 10% of student loan balances are now 90+ days behind on payments** Q4 2024: 0.4% are 90+ days delinquent Q1 2025: 7.7% Q2 2025: 10.2%

The Bureau of Labor Statistics Monthly Job Report: it’s based on two surveys the establishment & household. The survey in question is the former. It’s based on a 121K survey from non-farm private employers & government agencies comprising 631K worksites. The response rate has recently slipped below 60% down from pre pandemic rate of 70% and well below the 80% rate typical over a decade ago. The survey has a +/- of 100K each month. Typically with a three month window the response rate for a single monthly survey time improves to 90% which is why there are ongoing rolling revisions that are rarely as large as the downward 258K revision in June. The numbers are not rigged and they are the gold standard internationally.

Jobs report accuracy has suffered in recent years because the response rate to the BLS's establishment survey has fallen off a cliff since Covid. Has nothing to do with ideology or politics.

Federal Reserve governor Adriana Kugler is unexpectedly stepping down early from the central bank’s powerful board of governors, creating an early vacancy that will give President Donald Trump an early opportunity to shape the Fed’s leadership. Her term was slated to expire in January. Kugler missed this week's Fed meeting for personal reasons.

President Trump says he is firing the head of the Bureau of Labor Statistics after the weak jobs data. BLS puts out the jobs reports, CPI inflation, productivity and employment cost index, among other key statistics. This is basically unprecedented and will raise concerns about US data integrity going forward.

I've been calling this a "Frozen" job market for awhile. Now I would call it a red flag. The economy is barely adding any jobs. July: 73,000 June: 14,000 --> The weakest since Dec 2020 May: 19,000 Healthcare makes up almost all the jobs added in the past 3 months. Many sectors -- manufacturing, professional biz, warehouse, retail, government -- have LOST jobs in the past three months. The big preliminary annual revision coming out on Sept. 9 may even show job losses. (Or certainly an even weaker labor market so far in 2025). -->Companies do not want to hire or invest with this much uncertainty about tariffs, inflation, etc.

This labor market is in trouble. Healthcare are social assistance are pretty much the only sectors hiring. This is NOT healthy. **Just +73,000 job gains in July** Healthcare +55,000 Social assistance +18,000 Retail +16,000 Finance +15,000 Hospitality +5,000 State gov't +5,000 Transport/warehouse +4,000 Construction +2,000 Professional and biz services -14,000 Federal gov't -12,000 (down -84,000 since January) Manufacturing -11,000 Local gov't -3,000 Information -2,000

This is a gamechanger jobs report. The labor market now looks a lot weaker than expected. July job gains were a mere 73,000 June just 14,000 May just 19,000 Note: 75% of the jobs in July came from healthcare This puts a September rate cut from the Federal Reserve back on the table. #jobs