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U.S. job market slows but it’s not yet a ‘three-alarm fire’: economist

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2 years ago

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A “Now Hiring” sign is seen at a FedEx location on Broadway on June 07, 2024 in New York City.

Michael M. Santiago | Getty Images

The U.S. job market is cooling at a worrisome rate but not to an extent that warrants panic — at least, not yet, according to economists.

Their concern lies with the momentum of key labor-market metrics like unemployment, job growth and hiring.

Such barometers, which were historically strong just a year or so ago, have gradually weakened as the Federal Reserve raised interest rates to cool the economy and bring down inflation.

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A recession could result if the labor market keeps throttling back at its current pace, economists said.

“We’re still on this trajectory that’s not a three-alarm fire right now,” said Nick Bunker, economic research director for North America at the job site Indeed.

But if the decline doesn’t level off soon, he said, a soft landing for the economy may not be in the offing: “We’re going to land but it’s going to land with a crash.”

Why there’s ‘slowing momentum’

Employers added 142,000 jobs in August, the Bureau of Labor Statistics reported Friday, a figure that was lower than expected.

The good news: That figure is an increase from the 89,000 jobs added in July. The unemployment rate also fell slightly, to 4.2% from 4.3% in July.

However, several metrics point to “slowing momentum” throughout the labor market, said Ernie Tedeschi, director of economics at the Yale Budget Lab and former chief economist of the White House Council of Economic Advisers under the Biden administration.

The current level of job growth and unemployment “would be fine for the U.S. economy sustained over many months,” he said. “Problem is, other data don’t give us confidence we are going to stay there.”

For example, average job growth was 116,000 over the past three months; the three-month average was 211,000 a year ago. The unemployment rate has also steadily risen, from 3.4% as recently as April 2023.

Employers are also hiring at their slowest pace since 2014, according to separate Labor Department data issued earlier this week.

Hiring hasn’t been broad based, either: Private-sector job growth outside of the healthcare and social-assistance fields has been “unusually slow,” at a roughly 39,000 average over the past three months versus 79,000 over the past year and 137,000 over 2015 to 2019, according to Julia Pollak, chief economist at ZipRecruiter.

Workers are also quitting their jobs at the lowest rate since 2018, while job openings are at their lowest since January 2021. Quits are a barometer of workers’ confidence in their ability to find a new job.

Fmr. Atlanta Fed President on August jobs report: Labor market slowing, but not falling off a cliff

Job-finding among unemployed workers is around 2017 levels and “continues to drift down,” Bunker said.

“There’s a very consistent picture that the strong labor-market momentum we saw in 2022 and 2023 has slowed considerably,” Tedeschi said.

Overall, data points “are not necessarily concerning or at recessionary levels yet,” he added. “[But] they are softer. They may be preludes to a recession.”

Why layoff data is a silver lining

However, there is some room for optimism, economists said.

Permanent layoffs — which have historically been “the soothsayer of recessions” — haven’t really budged, Tedeschi said.

Federal data for unemployment insurance claims and the rate of layoffs suggest employers are holding on to their workers, for example.

The recent gradual rise in unemployment is largely not attributable to layoffs, economists said. It has been for a “good” reason: a large increase in labor supply. In other words, many more Americans entered the job market and looked for work; they’re counted as unemployed until they find a job.

“Once we start seeing layoffs, the game is over and we are in a recession,” Tedeschi said. “And that has not happened at all.”

That said, the job hunt has become more challenging for job seekers than in the recent past, according to Bunker.

Relief from the Fed won’t come quickly

Federal Reserve officials are expected to start cutting interest rates at their upcoming meeting this month, which would take pressure off the economy.

Lower borrowing costs may spur consumers to buy homes and cars, and for businesses to make more investments and hire more workers accordingly, for example.

That relief likely wouldn’t be instantaneous but would probably take many months to wind through the economy, economists said.

Overall, though, the current picture is “still consistent with an economy experiencing a soft landing rather than plummeting into recession,” Paul Ashworth, chief North America economist at Capital Economics, wrote in a note Friday.

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$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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7 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

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2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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