Julia Pollack

I'm not.

So this report overstates, understates the strength of the labor market right now because there are two huge temporary distortions at play in the data here.

The first is 100,000 or more federal workers who took the fork and came off payrolls, and some of them have gone into temporary frictional unemployment situations.

And the second big distortion in this report is the Schumer shutdown, which forced 900,000 federal workers off the job.

But it also led to weakness in the private sector because it forced work stoppages for federal contractors and led to temporary layoffs there.

So I expect the unemployment rate to jump back down very soon.

So the unemployment rate is exactly where it was when President Trump first took office in his first term.

And he has a track record of bringing it all the way down to 3.5%.

We have a bigger challenge this time because of the Biden inflation hangover, which forced the Fed to slam the brakes on the economy.

And that has hurt marginal workers the most.

But we are setting the stage for a huge comeback in 2026 and beyond with the One Big Beautiful Bill Act, which has hugely stimulative policies.

And you'll see those macro stimulative effects build into 2026.

They are things like expensing fast and accelerated, full and accelerated expensing for business investments, no tax on tips, no tax on overtime, no tax on Social Security.

So I think the reason that employment growth, the job growth slowed so dramatically between mid-2022 and mid-2024 is that rates were high.

And the longer rates stay restrictive, the more of the economy gets hurt.

The more businesses have to refinance, the double

the more families go out there and try to buy a home and find that it's just unaffordable.

So rates right now are still restrictive and they are still a problem for much of the economy.

Well, the Fed has a dual mandate, full employment on the one hand and price stability.

And this president has shown that his policies deliver both.