The raft of economic data released over the last few days has been kind of all over the map: Jobless claims were up and pending home sales were way down. Personal income is strong, consumer spending is middling and consumer inflation is moderating. Consumer sentiment is either improving from “lousy” or holding steady at “meh” depending who you ask.
Next week it’ll be all about jobs: Job openings, labor productivity, and then the May Jobs Report all come out.
April’s job creation was surprisingly strong, given all the tumult of tariffs, consumer freak-outs and market gyrations. May is expected to be more muted, but still pretty good.
Employment’s stayed on a pretty even keel, said John Leer, chief economist at Morning Consult.
“The job market has proven to be remarkably resilient in the face of tariffs and tariff uncertainty,” he said.
Leer predicts 150,000 jobs added in May, and unemployment holding at 4.2%.
“The narrative out there was that policy uncertainty would lead to a pullback in investment and then a reduction in hiring. I don’t believe that’s the case,” he said.
Partly because consumers haven’t pulled back their spending much.
“So as long companies are able to make money by employing workers, they’re going to do that. And that’s why workers continue to have reasonably solid levels of job security,” Leer said.
What’s less solid now is optimism about finding a new job, said Andrew Stettner, the director of economy and jobs at The Century Foundation.
“The number of people on unemployment is up as compared to last year — evidence that it is harder to find a job today, especially for young people coming out of college, we do see the job openings trailing downward,” he said.
This could partly be an impact of artificial intelligence.
“Hiring at VC-backed companies has gone down significantly,” said Peter Walker, senior director of insights at equity management firm Carta.
Walker said hiring at tech startups in early 2025 was only a third of the level in 2022. He doesn’t think companies are replacing current workers with AI, “But a lot of them are saying: ‘I have a team of five engineers. I don’t think I need any more because every single one of those is more productive now using AI.’”
Add that up at startups all over the country, and Walker said eventually we’ll see employment stagnate — and maybe even shrink — in the sector.
