Key Takeaways
- Richmond Fed President Thomas Barkin described the U.S. labor market as being in a "weak balance," noting that job growth is currently zero to slightly positive with a trend of "less hiring and less firing."
- ADNOC (ADNOCLS) reported that 15 of its vessels have been targeted since the start of regional conflicts, resulting in one death and 20 injuries among crew members.
- White House economist Kevin Hassett defended the independence of Fed Chair Kevin Warsh, stating that while Donald Trump and Warsh discuss the economy "all the time," the President does not provide interest-rate advice.
- Canada’s Ivey PMI fell to 55.1 in July, down from 56.2 in June, signaling a slight cooling in the pace of business activity expansion.
- The break-even point for monthly job creation is now estimated at approximately 40,000 jobs, according to Hassett, as the labor market adjusts to a post-pandemic equilibrium.
Labor Market in 'Weak Balance'
Richmond Federal Reserve President Thomas Barkin provided a sobering assessment of the U.S. employment landscape on Friday. Speaking at the NABE Conference, Barkin characterized the current situation as a "weak balance," where the data reflects a significant slowdown in both recruitment and layoffs. He noted that while the situation is not "optimistic," it represents the current reality of a cooling economy.
Barkin emphasized that job growth has flattened to zero or modest positive gains, a shift he attributed to businesses becoming more selective amid high borrowing costs. Despite the lack of robust hiring, the Fed official pointed out that the low level of firings is preventing a sharper economic downturn.
Shipping Risks Escalate for ADNOC
The Abu Dhabi National Oil Company (ADNOC (ADNOCLS)) issued a stark warning regarding the safety of international waterways. The company confirmed that 15 of its vessels have been attacked by missiles and drones since the onset of regional hostilities, including three attacks this week alone. These incidents have tragically resulted in one fatality and 20 injuries among crew members.
ADNOC stressed the urgent need for international authorities to protect the freedom of navigation and ensure safe commercial shipping. The company stated it is working closely with maritime security to safeguard its staff and assets while attempting to maintain its supply commitments to global customers.
Fed Independence and Political Dialogue
National Economic Council Director Kevin Hassett addressed concerns regarding the relationship between President Donald Trump and Federal Reserve Chair Kevin Warsh. Hassett confirmed that the two leaders maintain frequent contact regarding the broader economy but insisted that the President respects the central bank's autonomy.
Hassett clarified that it is "normal" for the President to inquire about employment figures and that he is "sure" Trump does not offer specific advice on interest rates. This comes as the administration monitors a labor market that Hassett believes requires only 40,000 new jobs per month to remain at a break-even level.
Canadian Business Activity Moderates
North of the border, the Canada Ivey PMI for July recorded a reading of 55.1, a decrease from the 56.2 reported in the previous month. While any reading above 50 indicates expansion, the decline suggests that the Canadian economy is growing at a slightly slower velocity. The data mirrors the broader North American trend of moderating business activity as the manufacturing and service sectors face persistent inflationary pressures.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.