Wall Street issues frequent reports: The U.S. job market is slowing down.

Wall Street issues frequent reports: The U.S. job market is slowing down.

Recently, although the U.S. Bureau of Labor Statistics has suspended the release of official data due to the government shutdown, Wall Street is not "moving forward in the dark." The latest reports from several institutions show that the U.S. job market is steadily losing momentum.

Recently, top institutions such as Goldman Sachs, Bank of America, and Carlyle Group, as well as private sector data from ADP, all consistently indicate that the U.S. labor market is steadily losing its growth momentum.

Bank of America reports that by analyzing client payroll and deposit data, it has found new evidence of rising unemployment rates and slowing job growth; feedback from Carlyle Group's portfolio companies and ADP data also confirm the slowdown in job growth. Goldman Sachs pointed out in an in-depth analysis report:

A slowdown in immigration, reduced government hiring, and macroeconomic uncertainty are the three main reasons behind the reduction of about 100,000 jobs in recent employment growth, while the impact of artificial intelligence (AI) and tariffs remains fairly limited for now.

Wall Street Consensus: Job Market Momentum is Weakening

Independent analyses from multiple financial giants together paint a picture of a cooling job market. These observations, based on private data, provide key perspectives beyond official figures for the market:

Goldman Sachs: Its internally compiled Labor Market Tightness Index has fallen back to 2015 levels, suggesting that the environment facing job seekers is becoming more challenging.

Bank of America: By analyzing its clients' payroll and deposit data, analysts found new evidence of rising unemployment and slowing job growth.

ADP Data: Data released earlier this month showed that private-sector jobs have been lost.

Carlyle Group: Based on feedback from its portfolio companies, U.S. job growth weakened further in September, continuing the sluggish trend from August.

Goldman Sachs: Three Major Factors Have Slowed Job Growth by 100,000

In its latest report, Goldman Sachs stated that the slowdown in immigration and government hiring, and increased macroeconomic and trade uncertainty, have all become drivers for the cooling job market. Goldman Sachs' Chief Economist Jan Hatzius said:

The comprehensive analysis shows that the slowdown in immigration, reduced government hiring and federal contract funding, and rising uncertainty have together led to a reduction of about 100,000 jobs in recent growth.

Core Driving Force (1): Slowing Immigration and Reduced Government Hiring

Goldman's analyst team, led by Chief Economist Jan Hatzius, dug deep into the pressures facing job creation, highlighting two main factors:

Slower Immigration Influx: Goldman estimates that the contribution of immigration to monthly labor force growth has dropped from 90,000 at the start of the year to 40,000 in August. Meanwhile, since January, monthly job growth in industries highly dependent on immigrant workers has decreased by 30,000. This suggests that part of the job growth slowdown is due to a deceleration in labor supply expansion.Reduced Government Hiring and Funding Cuts: Since the beginning of the year, the drop in government hiring has led to a reduction of about 30,000 in overall payroll growth. Furthermore, federal contract spending has seen a significant decline, further suppressing job demand in related areas.

Core Driving Force (2): Increased Macroeconomic and Trade Uncertainty

Companies are highly sensitive to macroeconomic outlook and external risks when making hiring decisions. Goldman's report points to the following uncertainty-driven pressures:

Macroeconomic Risks: This spring, market consensus forecasts for GDP fell while expectations of a recession probability rose. Although the outlook has since moderately improved, earlier concerns have already made companies more cautious about expanding hiring.Tariff Costs and Uncertainty: According to surveys by the Federal Reserve, some companies are reducing hiring as a broader cost-saving measure to counteract tariff-related expenses. While the direct impact of tariffs on hiring appears limited, the uncertainty they bring correlates with an overall decline in employment growth in affected industries.

Emerging Factor: Impact of Artificial Intelligence (AI) Remains Limited

Although the market is abuzz with discussion about AI replacing human jobs, Goldman's analysis shows that there is currently little evidence that the spread of AI (or anticipation thereof) is exerting major pressure on the broader labor market. However, in some specific sectors, the impact is already apparent:

In industries such as marketing, call centers, and graphic design, job growth has already slowed in recent years, with current growth rates about 10,000 lower than pre-pandemic trends. This suggests that AI's impact for now is localized rather than systemic.

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