Why Isn’t the Market Worried About a Cooling Labor Market?

Even with the stronger March revision, the bigger picture still looks less certain. Job growth may not be collapsing, but the trend suggests the labor market is losing momentum. That matters because weaker hiring can eventually lead to softer consumer spending, slower growth, and more pressure on corporate earnings. What’s strange is that equities don’t seem very bothered. Investors appear more focused on rate cut hopes, AI momentum, and strong earnings from large cap companies than on signs that the real economy may be cooling. Maybe the market sees slower labor data as good news for inflation. Or maybe it is ignoring a warning sign until it becomes impossible to miss.