The state of the labor market

Ahead of the FOMC September meeting, the labor market continues to embolden a dovish lean

article-image

BublikHaus/Shutterstock modified by Blockworks

share


This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.


It’s a big week for labor market data. With everything published except for tomorrow’s NFP report, let’s round up all the data we received this week and get an idea of where things stand — and how that contrasts with the expected Fed rate cut this September.

JOLTS

It’s always important to remember how lagged the JOLTS report is as a datapoint. This report is from July and, much like the jobs report we received last month, it’s quite weak.

Job openings surprised to the downside at 7.18 million, below the expected 7.4 million. 

When we contextualize that alongside how many unemployed people there are, we actually saw the jobs-workers gap go negative for the first time since the pandemic. 

Although not an outright sign of recession (we spent the entirety of the 2010s in negative territory), it does highlight the relative weakness of the labor market. 

A key input into the Beveridge curve is the job vacancy rate that comes from this report. 

I’m a big fan of the Beveridge curve as it’s an effective way to gauge the amount of slack in the labor market. Given where we are in the Beveridge curve now, any meaningful weakening in jobs available from this point forward would likely trigger an aggressive increase in the unemployment rate.

ADP report

With the recent firing of BLS Commissioner Erika McEntarfer, ADP’s employment data has taken on increased importance in gauging labor market strength. 

Although ADP gets a lot of flack since it comes out before NFP and thus has little predictive power, on a longer-term horizon the two actually track quite nicely: 

Today’s ADP report came in below expectations and further emboldened the doves on the FOMC to move forward with a cut in September:

Challenger Survey

Finally, we received today’s Challenger Survey layoffs report. It showed a 13% YoY increase, which is significant.

As economist Parker Ross noted in tandem with the chart above: “Last Aug. is a tough benchmark, when layoffs were already 81% above the pre-Covid norm, so the fact we’re up 13% YoY from that elevated level means we’re now 105% above the pre-Covid norm for Aug., up from 98% in July.”

Even without the NFP report in hand, the present labor market data overall offers plenty of rationale to warrant the Fed cutting rates in a couple of weeks.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Report Cover.png

Research

Centrifuge has quietly become one of the fastest-growing players in RWA tokenization, with TVL surging from $78M in March to $1.14B today. Its partnerships with Janus Henderson, Apollo, and S&P Dow Jones Indices have positioned it at the center of institutional adoption, while its multi-chain vault framework unlocks access to treasuries, credit, and equities onchain. With new fund launches on the horizon, protocol fees now live, and liquidity set to improve through upcoming listings, Centrifuge offers investors asymmetric upside in one of crypto’s largest and fastest-growing narratives.

article-image

The company introduced a dollar-backed stablecoin to power instant payments and microtransactions for AI-driven web platforms

by Blockworks /
article-image

The plan is to make GameShift the “consumer portal” that bridges non-crypto gamers into Web3

article-image

Google backs $1.4B of obligations and takes 5.4% stake as Cipher expands AI data center footprint

by Blockworks /
article-image

Nine banks plan MiCA-regulated token to challenge dollar dominance and strengthen Europe’s payments autonomy

by Blockworks /
article-image

Sponsored

The FAIR L1 embeds encrypted execution into the consensus layer and removes the transparency window that makes MEV possible

by Sponsored /
article-image

Corporate crypto ownership can “lift up” blockchain ecosystems to help spur institutional adoption, SharpLink Gaming co-CEO says