{"id":6830,"date":"2026-06-11T18:22:35","date_gmt":"2026-06-11T18:22:35","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=6830"},"modified":"2026-06-11T18:22:35","modified_gmt":"2026-06-11T18:22:35","slug":"goldman-sachs-drops-contrarian-take-on-the-jobs-market","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=6830","title":{"rendered":"Goldman Sachs drops contrarian take on the jobs market"},"content":{"rendered":"

<\/p>\n

The unemployment rate says the job market is holding steady.<\/p>\n

Goldman Sachs analysts, though, say that might not tell the whole story.<\/p>\n

In a fresh note shared with me, the firm argues that the labor market is softer than the headline 4.3% unemployment rate suggests.<\/p>\n

They argue that the job market is losing strength in ways that aren\u2019t showing up cleanly in the one number most fixated on.<\/p>\n

For the most part, the latest government jobs report looked solid on the surface.<\/p>\n

Nonfarm payrolls rose by 172,000 in May, and the unemployment rate stayed unchanged at 4.3%.<\/p>\n

However, Goldman\u2019s point is that \u2018stability\u2019 is not the same thing as strength.<\/p>\n

The firm\u2019s updated slack tracker, which weaves together 10 labor-market indicators, sits at 4.8%.\u00a0<\/p>\n

That is significantly higher than the official unemployment rate, suggesting more weakness beneath the surface than the headline number shows.<\/p>\n

\n

Goldman Sachs says broader labor-market indicators paint a different picture than unemployment data suggests<\/p>\n

RUNSTUDIO &sol; Getty Images<\/p>\n<\/figcaption><\/figure>\n

May jobs report shows steady hiring\u00a0<\/strong><\/h2>\n
    \n
  • Payrolls rose 172,000 <\/strong>in May.<\/li>\n
  • Unemployment held at 4.3<\/strong>%.<\/li>\n
  • Leisure and hospitality added 70,000<\/strong> jobs.<\/li>\n
  • Local government added 55,000<\/strong>; health care added 35,000<\/strong>.<\/li>\n
  • Financial activities lost 22,000<\/strong> jobs.
    \nSource: U.S. Bureau of Labor Statistics, May 2026 Employment Situation.\n<\/li>\n<\/ul>\n

    Goldman Sachs says the jobs market is weaker than it looks<\/strong><\/h2>\n

    The unemployment rate is the clearest number in the jobs report, but Goldman Sachs argues it may not be the most complete.<\/p>\n

    More Personal Finance:<\/strong><\/p>\n

      \n
    • Fidelity has a warning for anyone who left a 401(k) at an old job<\/strong><\/li>\n
    • Living trusts: what they do and who needs one<\/strong><\/li>\n
    • Fidelity sounds alarm on 401(k)s, IRAs<\/strong><\/li>\n<\/ul>\n

      The firm lays out the case that the labor market is softer than the 4.3% unemployment rate suggests.\u00a0<\/p>\n

      However, Goldman isn\u2019t being apocalyptic about it either.<\/p>\n

      The firm says the market has shown signs of stabilization, with trend job growth running at or above its breakeven pace estimate. But the broader dashboard tells a more cautious story.<\/p>\n

      Goldman\u2019s updated slack tracker now stands at 4.8%, above the official unemployment rate. The tracker pulls in 10 measures of labor-market tightness, including the quits rate, median unemployment duration, involuntary part-time work, discouraged workers, the prime-age employment-population ratio, and the gap between job openings and unemployed workers.<\/p>\n

      So in essence, Goldman is saying the labor market can feel weaker before layoffs surge.<\/p>\n

      That is especially true in what the firm calls today\u2019s \u201clow-hire, low-fire environment”. Workers may not be losing jobs in large numbers, but they may also have fewer good options if they want to switch roles or re-enter the workforce.<\/p>\n

      Moreover, Goldman Sachs analysts expect unemployment to rise only 0.1 percentage point further this year, peaking at 4.4%.<\/p>\n

      A softer jobs market could change the Fed\u2019s calculus<\/strong><\/h2>\n

      Goldman\u2019s job-market warning lands in the middle of a messy Fed debate.<\/p>\n

      Naturally, with a stronger surface-level report, things get remarkably tricky.<\/p>\n

      A tighter jobs market can keep wages elevated because companies must compete harder for workers.\u00a0<\/p>\n

      Higher wages are not bad for households, but they can keep service-sector inflation sticky if businesses pass those labor costs on to customers.\u00a0<\/p>\n

      That gives the Fed a reason to hold rates higher for longer.<\/p>\n

      A softer labor market points in the other direction.<\/p>\n

      When hiring slows, quits fall, and job seekers have a harder time finding work, wage pressure can ease even if unemployment has not jumped.\u00a0<\/p>\n

      That gives the Fed more room to cut because inflation risks look less threatening. Goldman\u2019s point is that some of that softening may already be happening beneath the surface.<\/p>\n

      Hence, the current scenario leaves the Fed in a difficult spot.\u00a0<\/p>\n

      If it waits for unemployment to spike, it may be too late. But if it cuts too soon while inflation remains sticky, it risks reigniting price pressure.\u00a0<\/p>\n

      That soft-under-the-surface view would normally support rate cuts. But the problem for the Fed is inflation. Goldman recently pushed its expected Fed cuts into 2027<\/strong>, citing stronger activity, job growth, tariff risk, higher oil prices, and the need for core PCE inflation to move closer to the Fed\u2019s 2%<\/strong> target.\u00a0<\/p>\n

      Reuters reported that Goldman now expects cuts in June and December 2027<\/strong>, rather than in December 2026 and March 2027<\/strong>.<\/p>\n

      Other firms are also leaning hawkish. J.P. Morgan Global Research sees the Fed holding rates steady through 2026<\/strong>, with the next move more likely a 25-basis-point hike<\/strong> in the third quarter of 2027<\/strong>.<\/p>\n

      So Goldman\u2019s jobs note suggests that the Fed\u2019s cushion may be thinner than unemployment suggests.\u00a0<\/p>\n

      Related: Jim Cramer drops blunt\u00a07-word verdict on oil prices<\/strong><\/p>\n

      #Goldman #Sachs #drops #contrarian #jobs #market<\/p>\n","protected":false},"excerpt":{"rendered":"

      The unemployment rate says the job market is holding steady. Goldman Sachs analysts, though, say that might not tell the whole story. In a fresh note shared with me, the… <\/p>\n","protected":false},"author":1,"featured_media":6831,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[6314,647,1360,430,33,1361],"class_list":["post-6830","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-contrarian","tag-drops","tag-goldman","tag-jobs","tag-market","tag-sachs"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/6830","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6830"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/6830\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/6831"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6830"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6830"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6830"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}