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Ripple Effect

The Growing Labor Market Gap

Loading ...Addison Wiggin

June 6, 2025 • 1 minute, 51 second read


jobsLaborPayroll

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

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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.

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


The Hindenburg Five

February 24, 2026 • Addison Wiggin

The stock market “rebalancing” is a polite way to put it. Energy and health care are getting a healthy boost. But tech hardware and software makers are still getting dressed down and have been asked to report to the principal’s office.

The great rotation underway has triggered a series of “Hindenburg Omens.” Five have occurred in recent weeks.

The Hindenburg Five
Piercing The Veil

February 23, 2026 • Addison Wiggin

The S&P 500 has traded in a 3.7% range over the past two months — less than half the 20-year median of 8.6%. One of the tightest ranges in modern history.

In trader parlance, the indexes are “flat,” a setup that often materializes before a sell-off at the top after a multi-year bull market.

Goldman Sachs told its own traders to be aware that institutional trading activity resembles a VIX reading near 35. Rather than a reading of 20, where the VIX has been trading over that same 2-month period.

The U.S. software ETF, IGV, tested its April 2025 lows last week and trades roughly 35% below its peak. The “SaaS-pocalypse” in software companies reflects the fear of Citrini’s 2028 scenario happening in real time.   That divergence now exceeds the spread seen at the peak of the Great Financial Crisis.

Under the surface, the “great rotation” we wrote about last week is threatening to widen.

Piercing The Veil
Oh. Canada

February 23, 2026 • Addison Wiggin

Despite its overly-educated 40-million-plus population, on a GDP per capita basis Canada is null. Collectively, the Great White North would rank as America’s second-lowest state, coming in above Mississippi, but below Alabama.

Oh. Canada
Matt Milner: SpaceX + xAI: What It Means for You

February 20, 2026 • Addison Wiggin

SpaceX is the most valuable private startup in history — and if its success continues, it might become the most valuable public company in history.

After all, as Musk famously said in 2023, “I have never lost money for those who invest in me and I am not starting now.”

For investors, SpaceX has been a wild, joyful ride — and now the journey continues!

Matt Milner: SpaceX + xAI: What It Means for You