September 3, 2025
Sentiment indicators for consumers and firms are pointing to a weaker employment report for August.
First, consumer sentiment about the outlook for the labor market has historically been a leading indicator for job growth. Using the historical relationship to predict the August employment report suggests that nonfarm payrolls on Friday could come in lower than the 90,000 expected by the consensus, see the first chart below.
Second, small businesses saying that they are experiencing poor sales has also been a leading indicator for the unemployment rate, and the current reading suggests the unemployment rate could rise over the coming months, see the second chart.
The bottom line is that sentiment indicators are suggesting that the labor market will continue to weaken.
Note: University of Michigan’s expected change in unemployment during the next year August numbers are preliminary estimates. Sources: US Bureau of Labor Statistics (BLS), University of Michigan, Macrobond, Apollo Chief Economist
Sources: National Federation of Independent Business, US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist
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