Catenaa, Saturday August 09, 2025- JPMorgan Chase has signaled that the U.S. economy may be headed for a recession following a disappointing July jobs report and significant downward revisions to prior employment data, according to a report by Fortune.
The labor market added 73,000 jobs last month, falling short of the expected 100,000, while July and May job figures were sharply revised down by a total of 258,000.
JPMorgan analysts said this slowdown in hiring, combined with new U.S. immigration policies, signals a cooling business demand for labor and an increased risk of recession.
The bank noted that such a drop in labor demand is often a precursor to broader economic contraction. “Firms normally maintain hiring gains through growth downshifts they perceive as transitory,” the analysts said.
“In episodes when labor demand slides with a growth downshift, it is often a precursor to retrenchment.”
JPMorgan also highlighted the impact of President Donald Trump’s tariffs, suggesting the Federal Reserve is likely to ease monetary policy soon.
“We think job creation is no longer appropriately described as solid,” the report said. “This week’s news supports our view that the Fed is moving closer to easing.”
Goldman Sachs echoed concerns this week, with chief economist Jan Hatzius describing the economy as growing slowly and warning of downside risks in the labor market. He noted GDP growth near stall speed and a gradually rising unemployment rate.
