The current state of the U.S. labor market is under scrutiny due to a discrepancy between the growth of nonfarm payroll jobs and the decline in household employment. While nonfarm payroll jobs have remained steady and strong, household employment has been on a downward trajectory. This discrepancy has caught the attention of Wall Street, and experts are trying to understand the reasons behind this trend.
One theory points to immigration as a possible factor. According to Alpine Macro, an estimated 4 million undocumented immigrants currently live in the U.S., and if about half of them are working, this could account for half of the discrepancy between the two surveys. This theory is also supported by major banks like Morgan Stanley, Goldman Sachs, and J.P. Morgan, who have been highlighting this gap and its implications for the economy.
The labor market data will be further analyzed in the upcoming JOLTS (Job Openings and Labor Turnover Survey) print and jobs report scheduled for tomorrow and Friday, respectively. For more expert insights and market analysis, viewers are encouraged to watch the full episode of “Asking for A Trend” on Yahoo Finance.
