Illustration: Lazaro Gamio/Axios

The U.S. jobs market, having long been the bedrock of the nation's economic expansion, is starting to worry economists ahead of next week's payroll data.

What's happening: After years of remarkably smooth sailing, 2019 has brought market volatility and some concern about whether the economy can keep adding jobs at a fast enough pace to sustain the expansion.

What we're hearing: Job gains don't necessarily have to turn negative to signal trouble, Mark Zandi, chief economist at Moody's Analytics, told Axios at a labor market conference hosted by payroll processor ADP this week.

All that's required is a strong slowdown in job growth. A 0.5% increase from a cyclical low on the unemployment rate has accurately predicted every recession in recent history and has never been a false positive, as Brookings economist Claudia Sahm noted recently.

  • "Once unemployment starts to rise, even from a very low level, it undermines confidence, and the only difference between an expanding economy and a recessionary one is faith," Zandi said.
  • "A recession is a collective loss of faith, and people lose faith when they start seeing unemployment rise."

Why now? A slowdown is not that unlikely, given the state of the labor market. The unemployment rate is at a 50-year low — it was 3.6% in May — and employers are reporting more trouble finding people to hire.

  • In a poll of small business owners conducted in May, 25% said that finding qualified workers was their No. 1 problem, according to the National Federation of Independent Business.
  • The trade war also is adding stress to the economy, but so far the effects have been concentrated in the trade and export sectors, which make up a small piece of overall employment.

What to watch: The all-important services side of the economy has been strong, but is beginning to feel the impact of the tight labor market, said Ahu Yildirmaz, co-head of ADP Research Institute. The number of job openings exceeded the number of unemployed Americans by the largest margin on record in April.

  • "Let's remember you need approximately 100,000 net new jobs to keep the economy moving. We're still above that level, however there are so many other factors," she said.
  • "If you look at the last couple months, the jobs numbers were really, really volatile."

The bottom line: Another blowout print like January's, which showed 312,000 jobs added, will calm a lot of jitters.

Go deeper

Deadly storm Zeta pummels parts of Alabama and Florida

A satellite image of Hurricane Zeta. Photo: National Hurricane Center/NOAA

Tropical Storm Zeta has killed at least two people and caused mass power outages after making landfall in Louisiana as a Category 2 hurricane Wednesday.

What's happening: After "battering southeastern Louisiana and southern Mississippi," Zeta weakened to a tropical storm over central Alabama early on Thursday, but it was still packing powerful winds and heavy rains, per the National Hurricane Center.

Taiwan reaches a record 200 days with no local coronavirus cases

Catholics go through containment protocols including body-temperature measurement and hands-sanitisation before entering the Saint Christopher Parish Church, Taipei City, Taiwan, in July. Photo: Ceng Shou Yi/NurPhoto via Getty Images

Taiwan on Thursday marked no locally transmitted coronavirus cases for 200 days, as the island of 23 million people's total number of infections reported stands at 550 and the COVID-19 death toll at seven.

Why it matters: Nowhere else in the world has reached such a milestone. While COVID-19 cases surge across the U.S. and Europe, Taiwan's last locally transmitted case was on April 12. Experts credit tightly regulated travel, early border closure, "rigorous contact tracing, technology-enforced quarantine and universal mask wearing," along with the island state's previous experience with the SARS virus, per Bloomberg.

Go deeper: As Taiwan's profile rises, so does risk of conflict with China

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

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