US Economy at Risk of Recession Amid Disappointing Jobs Report

The July Jobs report has economists warning that the US economy is close to "stall speed" and could tip into recession. The report showed disappointing payroll growth of 73,000 and downward revisions for May and June. Economists like Lawrence Summers and Betsey Stevenson blame policy decisions, while Danish economist Lars Christensen notes that the slowdown is occurring before the full effects of tariff increases have hit. The report has also led to President Trump's disapproval ratings soaring to a new high.

The July jobs report has sparked concern among economists that the US economy may be approaching "stall speed" and potentially tipping into recession. The report revealed disappointing payroll growth of 73,000, along with downward revisions for May and June, which indicated a significant slowdown in job creation.

Goldman Sachs chief economist Jan Hatzius warned that the US economy is losing momentum, noting that the job data suggests a picture of "stall speed." He stated that the economy is still growing but at a very slow pace, with the unemployment rate drifting higher [1]. Hatzius also suggested that the Federal Reserve (Fed) has the green light to cut rates in the coming months to support the labor market.

The poor jobs report has also had global repercussions, with Asian share markets following Wall Street lower. Fears for the US economy have led investors to price in an almost certain rate cut for September, undermining the dollar [2]. The dismal US jobs data has dented the dollar's crown of exceptionalism, snuffing out what had been a promising rally for the currency.

President Trump's disapproval ratings have soared to a new high following the report, as the firing of the head of the Labor Statistics department has threatened to undermine confidence in US economic data [2]. The news that Trump would get to fill a governorship position at the Federal Reserve early has also added to worries about the politicization of interest rate policy.

Despite the gloomy outlook, several senior Federal Reserve officials have characterized the labor market as "solid" and appeared in no rush to lower U.S. interest rates. They indicated that the Fed is going to wait for more information on employment and inflation before deciding to cut interest rates again [3].

The July jobs report has raised concerns about the US economy's trajectory, with economists blaming policy decisions and tariff increases for the slowdown. The report has led to a wait-and-see approach from the Fed, which is monitoring the labor market and inflation closely before making any decisions on interest rates.

References:
[1] https://dailyhodl.com/2025/08/03/us-economy-at-stall-speed-warns-goldman-sachs-as-labor-department-slashes-june-jobs-growth-by-90/
[2] https://www.business-standard.com/world-news/asia-shares-sideswiped-by-us-economic-jitters-retreat-in-oil-prices-125080400051_1.html
[3] https://www.marketwatch.com/story/top-fed-officials-unswayed-by-poor-july-jobs-report-take-wait-and-see-approach-to-rate-cuts-6b88d5df