Insights Chart of the Week

Job Market Is Good Enough

March 12, 2025

Time to Read: 2 minutes

Tariff headlines and federal government layoffs are adding to recent concerns about an economic slowdown. But the latest jobs and weekly jobless claims data continue to depict a job market that is healthy enough to continue to support consumer spending.

February’s nonfarm payrolls report showed the U.S. economy added 151,000 jobs, a bit short of expectations, but more than the previous month’s 125,000 jobs. Meanwhile the unemployment rate ticked modestly higher. However, weekly jobless claims are holding steady near the 225,000 average over the last year.

The labor market is a key factor in the economy’s health given that confidence about employment can cause consumers to adjust their spending. Although we expect some more near-term softening of employment data as it begins to reflect the federal government layoffs, we believe the labor market should remain healthy enough to support consumer spending. We are likely to see some slowing in economic activity, but we believe the U.S. economy will grow by 1.5-2% this year.

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Positive Signals from Industrial Production?

Industrial production is a proxy for the level of manufacturing in the economy, and last week’s report showed the highest growth rate in three years.

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Healthy Correction?

After climbing 17% year to date through late October, the S&P 500 declined 5% through November 20. We believe the market was due for a healthy correction. While further downside is possible, it would not concern us.

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The Global Economy Is Holding Up

This past year was rife with risks to the global economy: policy changes, tariff uncertainty and more. Yet, the global economy held up as manufacturing and services activity strengthened across the world.

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Retail Sales Remain Resilient

Considering the slowing job market, we dove into retail sales data to search for signs of the direction of household spending. We analyzed existing-store sales and found that, despite the softening labor market and concerns about growth, aggregate consumer spending remains resilient.

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