A “Good Enough” Job Market

June 10, 2025

Time to Read: 3 mins

By no measure are we seeing a booming job market, but we are also not seeing a deteriorating one. In fact, current labor metrics lead us to conclude that the job market remains “good enough” to support our economic growth expectations for the year.

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Despite heightened uncertainty around the administration’s trade and tax policies as well as concerns about slowing economic growth, the labor market, a beacon for the direction of consumer spending, remains stable. Metrics such as the number of layoffs and the unemployment rate can dramatically affect the attitudes and spending habits of consumers, who act as the driving force of gross domestic product (GDP).

As released this past Friday, nonfarm payrolls grew 139,000 in May—more than expected and only slightly lower than April’s 147,000. Moreover, job growth in April and May came in at the highest levels reported this year and were just shy of the 155,000 average over the last 18 months. Jobless claims remain in the 210,000-250,000 range reported over the past year while at 1.1%, the layoff rate is the lowest it has been in 12 months.

While we do not believe the current job market is thriving, it does not show material deterioration. It remains “good” enough to support positive economic growth. We maintain our expectation for GDP of about 1% this year amid a non-recessionary slowdown.

Chart of the week | Macroeconomic

Tracking the margin uptrend

Rising margin expectations continue to support equities, underscoring the resilience of corporate profitability in the face of last year’s tariffs and this year’s Middle East war. The U.S. remains especially strong compared to peers, though first quarter earnings will be an important test.

Chart of the week | Macroeconomic

Time to buy tech?

Technology valuations have meaningfully declined over the past year, but the sector continues to stand out for its strong earnings growth and relative resilience. While near-term uncertainty remains, tech still appears well positioned as a key driver of broader market growth.

Chart of the week | Macroeconomic

Job market hanging in there

Recent jobless claims data point to a resilient U.S. labor market, with both initial and continuing claims remaining low and signaling that unemployment is still contained. Although job growth has softened and remains subdued, March’s job growth of 178,000, the highest since 2024, is encouraging. Our constructive outlook still holds despite continued uncertainty related to the war in the Middle East.

Chart of the week | Macroeconomic

Markets since Iran conflict

Markets are reacting to the Middle East conflict with sharp moves across asset classes, signaling broad risk repricing and shifting safe haven behavior. While volatility is elevated, fundamentals like earnings growth continue to support our constructive outlook.

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