The Growing Labor Market Gap

Today’s labor market data came in line with expectations. Unemployment held steady at 4.2%.

Economists yawned. Markets – no doubt relieved to have something else to talk about besides the Trump/Musk feud – pushed higher.

But we can’t help but notice a growing gap in the data:

Turn Your Images On

The government’s employment data looks much stronger than data provided by ADP – the private sector payroll giant. Of course, ADP is basing its data on actual customers, and not making all sorts of seasonal or one-off adjustments.

There may be a case for those adjustments. But with a growing gap that causes the government’s data to look rosier than the private sector – it’s a warning sign.

And with many government job cuts still not showing up in the data – you can’t file unemployment while you’re still on severance – the trend is likely to worsen before it gets better.

Our colleague Andrew Zatlin, the #1 payroll analyst on Bloomberg, has made similar observations – that the trend will start to get worse in the third quarter, and that government revisions will likely start to bring today’s gap down as well.

Until then, mind the gap.

~ Addison

Get paid $1,500 to write a two-page story

This unique story is two pages at most. And companies everywhere pay writers $1,500 on average to write it for them. Get all the details in this free guide (along with 8 more great paying opportunities).

GET ALL THE DETAILS HERE.

P.S. There are plenty of moving parts in the economy right now, and we explored several of those trends with Frank Holmes yesterday on Grey Swan Live!

As always, if you’re not yet a full-fledged member, you’re missing out on unique, timely, and ultimately critical knowledge about today’s markets.

Based on the performance of some of our recent special report positions – warning investors on United Healthcare before it fell 50%, the rise of next-generation nuclear power plans, and even a look at a company that just got invited to join the S&P 500 index – a membership is an investment that more than pays for itself.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)

Today’s labor market data came in line with expectations. Unemployment held steady at 4.2%.

Economists yawned. Markets – no doubt relieved to have something else to talk about besides the Trump/Musk feud – pushed higher.

But we can’t help but notice a growing gap in the data:

Turn Your Images On

There may be a case for those adjustments. But with a growing gap that causes the government’s data to look rosier than the private sector – it’s a warning sign.

And with many government job cuts still not showing up in the data – you can’t file unemployment while you’re still on severance – the trend is likely to worsen before it gets better.

Until then, mind the gap.

~ Addison

Get paid $1,500 to write a two-page story

GET ALL THE DETAILS HERE.

P.S. There are plenty of moving parts in the economy right now, and we explored several of those trends with Frank Holmes yesterday on Grey Swan Live!

As always, if you’re not yet a full-fledged member, you’re missing out on unique, timely, and ultimately critical knowledge about today’s markets.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)

Our forecast will feel obvious in hindsight and controversial in advance — the hallmark of a Grey Swan.

Most analysts we speak to are thinking in terms of the history of Western conflict.

They expect full-frontal military engagement.

Beijing, from our modest perch, prefers resolution because resolution compounds its power. Why sacrifice the workshop of the world, when cajoling and bribery will do?

Taiwan will not fall.

It will merge.

Wars, technology races, and political upheavals — all of them rest on fiscal capacity.

In 2026, that capacity will tighten across the developed world simultaneously. Democracies will discover that generosity financed by debt carries conditions, whether voters approve of them or not.

Bond markets will not shout so much as clear their throats. Repeatedly.

Taken together, the seven Grey Swans of 2025 behaved less like isolated events and more like interlocking stories readers already recognize.

The year moved in phases. A sharp April selloff cleared leverage quickly. Policy shifted toward tax relief, lighter regulation, and renewed tolerance for liquidity. Innovations began to slowly dominate the marketplace conversation – from Dollar 2.0 digital assets to AI-powered applications in all manner of commercial enterprises, ranging from airline and hotel bookings to driverless taxis and robots.

Back in April, when we published what we called the Trump Great Reset Strategy, we described the grand realignment we believed President Trump and his acolytes were embarking on in three phases.

At the time, it read like a conceptual map. As the months passed, it began to feel like a set of operating instructions written in advance of turbulence.

As you can expect, any grandiose plan would get all kinds of blowback… but this year exhibited all manner of Trump Derangement Syndrome on top of the difficulty of steering a sclerotic empire clear of the rocky shores.

The “phases” were never about optimism or pessimism. They were about sequencing — how stress surfaces, how systems adapt, and what must hold before confidence can regenerate. And in the end, what do we do with our money?!