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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

Activision Blizzard employees say HR department failed them

Illustration: Sarah Grillo/Axios

Following a lawsuit filed by California against Activision Blizzard, allegations of harassment, misconduct, and assault continue to emerge from people who point to the company's HR department as being part of the larger problem.

Why it matters: Sources say the company's culture favors a clan mentality and functioned under a broken HR department that undermined and discounted victims' experiences, and did not protect their identities.

Andrew Cuomo refuses to resign: "I never touched anyone inappropriately"

New York Gov. Andrew Cuomo announced on Tuesday that he will not resign from his post, despite an independent investigation finding that he sexually harassed multiple women in violation of federal and state law.

Why it matters: Cuomo had previously urged those calling for his resignation — including nearly every prominent New York Democrat — to wait for the results of the investigation overseen by New York Attorney General Letitia James. The findings were damning, but Cuomo said he is not going anywhere.

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3 hours ago - Science

Boeing is getting its do-over

Boeing's Starliner awaits its launch atop an Atlas V rocket. Photo: NASA/Joel Kowsky

Boeing is set to launch a redo of an uncrewed test of its Starliner spacecraft — designed to one day carry astronauts — to the International Space Station this week.

Why it matters: This is a high-stakes test for Boeing, which failed to get its Starliner to the station during its first uncrewed test flight in December 2019.