US labour market close to breaking point

Recently, negative signals on the labour market have increased. Until now, companies had been cautious, freezing both hiring and layoffs decisions, while waiting for greater clarity on economic policy, such as the increase in custom tariffs. This wait-and-see approach cannot be sustained indefinitely. In the latest Beige Book, the rise in redundancies remains modest, but workforce attrition is more pronounced (end of teleworking, automation via AI). Employment growth is close to stalling. The market may be pleased that the Fed is about to resume its cycle of policy rate cuts, but the underlying reason is that it fears a major economic slowdown.