Goldman Sachs' Jan Hatzius: It looks like employment growth is fairly close to zero

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Goldman Sachs 9.0
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Jan Hatzius 9.0

Goldman Sachs' Jan Hatzius: It looks like employment growth is fairly close to zero

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I'm comfortable that the Fed will deliver a rate cut at the December meeting despite uncertainty injected in Chair Powell's press conference. Labor market is weakening with hiring and openings down, while inflation pressures appear manageable and trending towards the Fed’s target after accounting for tariff effects, supporting expectations for a medium-term cautious decline in yields as the Fed moves to cut rates.

10/29/2025 5:37:32 PM	medium term cautious down	20 days later	+0.98%	-0.49%
10/28/2025 6:42:40 PM	medium term cautious down	20 days later	+1.60%	-0.80%
10/28/2025 1:59:32 PM	short term cautious down	5 days later	+1.18%	-0.59%
10/24/2025 6:55:30 PM	medium term cautious down	21 days later	+3.40%	-1.70%
10/15/2025 9:58:39 AM	medium term cautious down	20 days later	+4.55%	-2.28%
10/7/2025 1:51:58 PM	short term up	5 days later	-1.89%	-1.89%
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9/16/2025 4:19:00 PM	medium term cautious down	20 days later	+1.25%	-0.63%
9/11/2025 1:30:06 AM	short term cautious down	5 days later	+0.37%	-0.18%
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9/2/2025 1:47:03 PM	short term sharp up	5 days later	-3.92%	-5.88%
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8/1/2025 6:12:49 PM	short term down	7 days later	+1.74%	-1.74%

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Another jobs Friday with no government data due to the shutdown. Yumish, though coming in very low, near the lowest level ever since the 1970s as worries begin to build about the consumer and the macro environment overall. Our next guest says we may be close to the worst jobs market in 50 years outside of recession. Let's bring in Goldman Sachs chief economist Jan Hatzius talk about what data he's watching and where he sees the market going from here. Jan, it's good to see you. Happy Friday.

Host
Jan Hatzius

Very good to see you as well. Is that a fair way to frame your view on jobs right now outside of recession? I think that's probably right. Certainly, it really depends on what you look at. For example, the expected change in the unemployment rate in the University of Michigan numbers is really low reading you don’t see outside of recession. Other indicators about current employment or unemployment look better. So you have to triangulate a lot. But timely indicators are looking weak, very weak. Employment growth looks close to zero, openings and hiring are weak and potentially still getting weaker. Layoff claims look good but layoff announcements are up, which is concerning. GDP looks okay on paper but it's distorted by front-loading effects so labor market numbers are more reliable for now. The Challenger layoffs number was an outlier and suggests labor market may be weaker than hoped. AI risks to labor market exist but so far impact looks limited and delayed. Inflation numbers have been relatively good, with tariff pass-through being a known issue. Core PCE less tariffs is closer to 2%, so inflation is encouraging. Labour market news is more concerning but inflation is manageable. I'm comfortable that the Fed will deliver a rate cut at the December meeting despite uncertainty injected in Chair Powell’s press conference.
Thanks, as always. Good to see you even without the jobs number.

Host

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