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Looking beyond the jobs data for warnings that economic slowdown has arrived, the global tariff war has already dragged on too long with too few negotiated deals with America’s largest trading partners. Whilst many on Wall St remain fixated on jobs data, usually an early but lagging indicator that the economy is slowing down, this time the rules seem different. The jobs data thus far is relatively strong. Federal layoffs will mostly not show until later in the summer for the many who took the packages offered and Corporate layoffs have remained balanced thus far.

What we are seeing is a slowdown in hiring and a real hesitation to hire. That impact is sufficient to cause it’s own minefield if that environment is to persist. Hiring is in fact at it’s lowest in a decade if we exclude the pandemic. Another concerning factor is wage growth within the private sector has now dropped below the Fed Funds rate. Rarely are these conditions ever seen unless the economy is in recession. Predictions the US will enter into recession are also growing. Some now calling 50-60% chance of recession.

As talked about earlier this week, the worsening situation at US Ports reporting 35% fall in cargo arriving, in particular at LA Ports sends a clear message, this time around recession will commence at the US Ports, and not with jobs data.

The pressure is mounting on the Federal reserve to ease the impact of a slowing economy with reducing rates. Today is unlikely to see any change in that policy for the month of May. With bets increasing on a June cut, as the Fed tries to weigh the yet fully unquantified impact of the tariff war on the economy.

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