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There are three reasons why job growth is slow: 1) Lower immigration, 2) AI implementation and 3) fewer government jobs.
Specifically:
The first chart below shows that at the current level of GDP growth, nonfarm payrolls should be 263k every month.
The second chart indicates that a key reason for the slow job growth is that the growth rate in the foreign-born labor force has been significantly weaker than normal. Fewer people looking for jobs means fewer people get hired.
The third chart indicates that AI implementation is likely improving productivity.
The fourth chart shows that government job growth was artificially high in 2022, 2023 and 2024. Combined with DOGE, government job growth is now returning to more normal levels.
The bottom line is that the weak labor market is not due to weaker labor demand, but rather to weaker labor supply because of immigration, AI implementation and a normalization of job growth in the public sector.
In short, slow job growth is not the result of a slowing economy. Because if it were, then GDP, consumer spending and capex spending would also be slowing.
The conclusion is that the Fed should focus less on the slowdown in job growth and more on the ongoing uptrend in inflation, see the fifth and sixth charts.
Sources: BEA, BLS, Haver Analytics, Apollo Chief Economist 
Sources: BEA, BLS, Haver Analytics, Apollo Chief Economist 
Note: Survey from November 2024. Sources: The Impact of Generative AI on Work Productivity | St. Louis Fed, Apollo Chief Economist 
Sources: US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist 
Sources: Institute for Supply Management (ISM), US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist
Sources: Federal Reserve Bank of Dallas, Federal Reserve Bank of Kansas City, Federal Reserve Bank of New York, Federal Reserve Bank of Philadelphia, US Bureau of Economic Analysis (BEA), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The hiring rate measures the number of hires during the entire month as a percentage of total employment, and it is currently at recessionary levels, see chart below.
Similarly, the quits rate measures the number of employees who voluntarily left their jobs during a month, expressed as a percentage of total employment, and the quits rate is also low.
Combined with a declining number of job openings, rising unemployment, and slower job growth, the bottom line is that the labor market is at a standstill, where workers are not getting hired or voluntarily changing jobs.
Sources: US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Looking at annualized month-over-month growth rates shows that 60% of items in the CPI basket are growing faster than 3%, see chart below. Is a second inflation mountain emerging?
Sources: BLS, Apollo Chief Economist See important disclaimers at the bottom of the page.
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We have put together a 75-page chart book with private sector data to monitor during the shutdown, and it is available here. We will update and publish this going forward as long as the shutdown continues.
See important disclaimers at the bottom of the page.
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We have updated our outlook for private markets, it is available here.
Sources: Bloomberg, Apollo Chief Economist 
Source: Apollo Chief Economist See important disclaimers at the bottom of the page.
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We are bullish on Japan. Corporate profits are trending higher, growth is expected to accelerate over the next 12 months and inflation is expected to decline from its current elevated levels. For more, see charts below and our latest outlook for Japan here.
We are hosting our Apollo Global Industrial Renaissance Conference in Tokyo on October 20, where Apollo’s senior management and investment professionals will discuss opportunities to invest in key sectors like digital infrastructure, the energy transition and manufacturing, see also here.
Sources: Ministry of Finance Japan, Bloomberg, Macrobond, Apollo Chief Economist 
Sources: Ministry of Finance Japan, Bloomberg, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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A year ago, former ECB president and Italian prime minister Mario Draghi laid out 383 policy recommendations to make the European economy more competitive, and so far, only 11% of his proposals have been implemented, see chart below.
Growth is weak in Europe, and European politicians need to move much faster if they want to make the European economy more competitive.
Sources: European Policy Innovation Council (EPIC), Apollo Chief Economist See important disclaimers at the bottom of the page.
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The consensus has been wrong since January. The forecast for the past nine months has been that the US economy would slow down. But the reality is that it has simply not happened, see chart below. GDP growth in the second quarter was 3.8%, and the Atlanta Fed predicts that GDP in the third quarter will be 3.9%. Yes, job growth is slowing, but this is the result of slowing immigration.
The bottom line is that the US economy remains remarkably resilient, and it is becoming increasingly difficult to argue that we are still waiting for the delayed negative effects of what happened six months ago on Liberation Day in April.
For investors, this means that the upside risks to inflation are growing, particularly if the Fed continues to cut rates.
Note: Q3 2025 GDP = Atlanta Fed GDPNow estimate. Sources: BEA, Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The consensus expects nonfarm payrolls for September to come in at 50,000, and I think that is too pessimistic. The charts below with incoming daily and weekly data for September show that:
1) Trade policy uncertainty is improving
2) Economic policy uncertainty is improving
3) Consumer expectations to business conditions are improving
4) Consumers are less worried about losing their jobs
5) Corporate capex plans are improving, and jobless claims are still low
6) The daily TSA data for the number of people traveling on airplanes is strong
7) Data for the number of people going to Broadway shows, the movies and visiting the Statue of Liberty is strong
8) Weekly data for same-store retail sales is strong
9) Weekly data for bank lending is accelerating
10) Weekly bankruptcy filings are starting to trend lower
11) Weekly data for business formation is still strong
12) There are significant upside risks to inflation in the regional Fed surveys and in ISM services price paid
Combined with the Atlanta Fed expecting GDP growth in the third quarter at 3.9%, the bottom line is that the economy continues to do better than the consensus expects, and the labor market has likely weakened because of lower immigration and perhaps also AI implementation.
With continued strong growth and upside pressures on inflation from tariffs, immigration restrictions, and the declining dollar, the FOMC should really be talking about rate hikes rather than rate cuts.
Our chart book with high-frequency indicators for the US economy is available here.
Sources: Economic Policy Uncertainty, Macrobond, Apollo Chief Economist 
Sources: Economic Policy Uncertainty, Macrobond, Apollo Chief Economist 
Sources: Conference Board, Macrobond, Apollo Chief Economist 
Sources: Conference Board, Macrobond, Apollo Chief Economist 
Sources: National Federation of Independent Business, Federal Reserve Bank of Dallas, Federal Reserve Bank of Kansas City, Federal Reserve Bank of New York, Federal Reserve Bank of Philadelphia, Business Roundtable, Macrobond, Apollo Chief Economist 
Sources: US Dept of Homeland Security, Macrobond, Apollo Chief Economist 
Sources: Boxofficemojo.com, Apollo Chief Economist 
Sources: Redbook Research Inc., Macrobond, Apollo Chief Economist 
Sources: Federal Reserve, Macrobond, Apollo Chief Economist 
Note: Filings are for companies with more than $50 million in liabilities. For week ending on September 26, 2025. Sources: Bloomberg, Apollo Chief Economist 
Sources: US Census Bureau, Macrobond, Apollo Chief Economist 
Sources: Federal Reserve Bank of Dallas, Federal Reserve Bank of Kansas City, Federal Reserve Bank of New York, Federal Reserve Bank of Philadelphia, US Bureau of Economic Analysis (BEA), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The US dollar has depreciated almost 10% since the beginning of the year, and the Fed’s model for the US economy finds that a 10% depreciation results in a 0.3% boost to inflation. Put differently, there is not only upward pressure on inflation from tariffs and immigration restrictions but also from the ongoing dollar depreciation, see chart below.
Sources: Federal Reserve, US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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