Krugman Calls Labor Market Soft, Disturbed by Warsh's View

Summary

Nobel laureate Paul Krugman discussed the June US jobs report, characterizing the labor market as soft but noisy, with job growth downshifting due to reduced immigration. He criticized Kevin Warsh’s call for more real-time Fed data reliance as dangerous. Krugman also warned that the Supreme Court’s Slaughter ruling and uncertainty over USMCA permanence create harmful policy unpredictability, though he expressed long-term optimism grounded in the decency of ordinary Americans.

• Jobs report shows 57k new jobs; Krugman calls monthly data noisy and sees labor market as soft.
• Job growth downshift aligns with slower labor force growth from immigration crackdown.
• Wages indicate weak worker bargaining power, reinforcing view of a soft market.
• Krugman disturbed by Kevin Warsh’s push for real-time Fed data, warning against overreaction.
• Slaughter Supreme Court ruling gives president excessive discretion over agencies like FTC, harming business certainty.
• USMCA not being made permanent adds to uncertainty for North American supply chains.
• AI impact on jobs is unknown; most current economic stress comes from tariffs and the war in Iran.
• Despite short-term disappointment, Krugman remains hopeful because of ordinary Americans' decency.