Hedgie's Market Edge - September 8, 2025

🦔Welcome back! This week marked a decisive shift in the economic narrative, with Friday's dismal jobs report finally forcing markets to confront the labor market deterioration I've been tracking for months. The reaction tells you everything about current positioning: stocks hit new highs despite awful employment data because traders are celebrating the Fed's upcoming rescue mission.

August delivered just 22,000 jobs, well below the 75,000 expected, while unemployment rose to 4.3% - the highest since 2021. What made it worse was the June revision showing the first monthly job losses since 2020. For the first time since 2021, there are now more unemployed people than job openings.

This isn't cyclical weakness anymore. It's structural change that rate cuts alone won't fix.

THE LABOR MARKET: FROM FROZEN TO CRACKING

The employment picture is deteriorating faster than most anticipated. When you exclude healthcare jobs, total employment has actually declined in three of the last four months. Multiple sectors posted outright job losses including information, financial activities, manufacturing, and business services.

One economist described it as "a white-collar and a blue-collar jobs recession." Companies aren't just being cautious about hiring; they're actively pulling job postings and cutting positions. The combination of tariff uncertainty, AI displacement, and policy volatility has created what I've been calling a hiring freeze that traditional monetary policy can't easily address.