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

Recently, despite the U.S. Bureau of Labor Statistics suspending the release of official data due to the government shutdown, Wall Street has not been "groping in the dark." Several institutions' latest reports indicate that the U.S. job market is steadily losing momentum.

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

Bank of America stated that by analyzing client salary and deposit data, they found new evidence of rising unemployment and slowing job growth; Carlyle Group corroborated the slowdown in job growth based on feedback from its portfolio companies and ADP data. Goldman Sachs pointed out in a detailed analysis report:

Slowing immigration, reduced government hiring, and macroeconomic uncertainty are the three main reasons for the recent slowdown in job growth by about 100,000 people, while the impact of artificial intelligence (AI) and tariffs is currently still relatively limited.

Wall Street Consensus: Job Market Momentum is Weakening

Independent analyses from several financial giants collectively paint a picture of a cooling job market. These observations based on private data provide the market with a critical perspective beyond official data:

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

Bank of America: By analyzing its clients' salary and deposit data, analysts have 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 Factors Leading to a 100,000 Person Slowdown in Job Growth

Goldman Sachs stated in its latest report that slowing immigration, reduced government hiring, and rising macroeconomic trade uncertainty have become the driving forces behind the slowdown in the job market. Goldman Sachs Chief Economist Jan Hatzius stated:

Comprehensive analysis indicates that slowing immigration, reduced government hiring and federal contract funding, along with rising uncertainty, have collectively led to a recent slowdown in job growth of about 100,000 people.

Core Driver (1): Slowing Immigration and Reduced Government Hiring

Goldman Sachs' analyst team, led by Chief Economist Jan Hatzius, has deeply analyzed the pressures facing job creation, with two factors being particularly prominent:

• Slowing immigration inflow: Goldman Sachs estimates that the contribution of immigration to monthly labor force growth has decreased from 90,000 at the beginning of the year to 40,000 in August. Meanwhile, since January, monthly job growth in industries heavily reliant on immigrant workers has decreased by 30,000. This indicates that part of the slowdown in job growth stems from a deceleration in labor supply growth.
• Reduced government hiring and funding cuts: The decline in government hiring this year has led to an overall reduction in salary growth of about 30,000. Additionally, federal contract spending has also seen a significant decline, further suppressing employment demand in related fields Core Driving Force (II): Rising Macroeconomic and Trade Uncertainty

Companies are highly sensitive to macroeconomic prospects and external risks when making hiring decisions. Goldman Sachs' report highlights the pressure brought by the following two uncertainties:

• Macroeconomic Risks: This spring, the consensus forecast for GDP has declined, while expectations for the probability of an economic recession have risen. Although the market outlook has moderately improved since then, earlier concerns have made companies more cautious about expanding their hiring scale.
• Tariff Costs and Uncertainty: According to a Federal Reserve survey, some companies are cutting back on hiring as part of broader cost-saving measures to offset the costs brought by tariffs. While the direct impact of tariffs on hiring seems limited, the uncertainty they create is correlated with the overall decline in employment growth in affected industries.

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

Despite extensive discussions in the market about AI replacing human jobs, Goldman Sachs' analysis shows that there is currently little evidence that the proliferation of AI (or expectations for its proliferation) is exerting significant pressure on the broader labor market. However, impacts have already been observed in certain specific areas:

In industries such as marketing, call centers, and graphic design, employment growth has slowed in recent years, with the current growth rate approximately 10,000 jobs lower than the pre-pandemic trend. This indicates that the impact of AI is currently localized rather than systemic.

Risk Warning and Disclaimer

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