April Employment Preview

Churn may be stabilizing, but only after a four-year collapse. The Fed is going to have to decide between their mandates, but the April report doesn't seem likely to be the catalyst.

• We believe the labor market appears superficially stable, but low churn, questionable data quality, and signs of weak labor demand make us skeptical of the “balanced” narrative.

• We expect inflation to remain above the Fed’s 2% target, forcing policymakers to eventually confront a tradeoff between price stability and labor market deterioration.

• We see crosscurrents—tight policy, tariffs, and weak small business hiring versus tax incentives, resilient consumption, and AI-driven shifts—leaving overall labor demand soft and uneven.

• We have low conviction in the near-term employment outlook but broadly expect weak labor demand, subdued wage growth, and only tentative signs that churn may be bottoming.