From MarketWatch, September 29:
TS Lombard’s Dario Perkins says this chart helps explain why the Fed has started cutting rates again
A weakening U.S. labor market is a risk for both the U.S. economy and markets right now. But the most closely watched numbers — the rate of new jobs created and the official unemployment rate — don’t tell the full story.
For that, Dario Perkins, an economist with TS Lombard, has a chart that, according to him, offers a more compelling justification for why the Federal Reserve started cutting interest rates again in September after a nine-month pause.
The six-month rate of change in “core” jobs, which Perkins defines as the U.S. payrolls figure excluding government and healthcare, has slowed to just 0.02%, leaving it barely in positive territory.
As presented, the data clearly show that the central bank had good reason to restart rate cuts, Perkins said. It undercuts the argument that pressure from the White House exerted undue influence on the Fed’s decision-making process.
The data also highlight the uniqueness of the current state of the labor market. Since at least the early 1960s, there has never been a time when labor-market growth, based on this measure, has stalled out for months on end. Usually, a slowdown in hiring is followed by rising layoffs and a recession. In the past, when the pace of job creation has fallen to zero, or slipped below it, a recession has typically been under way.
Another important detail highlighted by this chart: Over the past year, the U.S. economy has depended more heavily on the healthcare sector as an engine of job creation. According to Eric Pachman, chief analytics officer at Bancreek Capital Advisors, jobs in healthcare and social assistance accounted for a whopping 87.3% of total private payroll growth in 2025. That is the highest share in recent memory....
....MUCH MORE
Related, September 28:
"Fed's Bowman says decisive rate cuts needed to offset labor market risks"
