"Gold standard" job report shows jobs slowing more. With echoes of early 2008

On Friday, we got the release of the "gold standard" Quarterly Census of Employment and Wages for the 2nd Quarter of 2025. The QCEW from 3 months ago played a large role in the Bureau of Labor Statistics projecting a reduction of 911,000 jobs through March vs previous reports, so it's worth looking to see if this QCEW report indicates further benchmark reductions would be coming in a couple of months.

The QCEW report shows year-over-year job growth between June 2024 and June 2025 dropping off to just over 420,000 total jobs, and 236,575 private sector jobs. As you can see, this is a growth rate barely ¼ of what it was between June 2023 and June 2024, continuing a trend of diminishing job growth that we’ve had since unemployment dropped to 3.5% at the start of 2023.

The QCEW shows Wisconsin on a similar trajectory, even with our lower population growth rate compared to the rest of the nation. Our 12-month job growth kept up for most of 2024, but it started dropping off at the end of 2024 and was at or below 0 by Spring of this year.

That’s not good, although several of our Midwestern neighbors were doing even worse in the June 2025 QCEW report, including Minnesota, Michigan, and (especially) Iowa.

An especially weak part of the jobs market over those 12 months was in manufacturing, with a loss of 207,548 jobs in the sector in the latest QCEW report, and 46 of 50 states having fewer manufacturing jobs in June 2025 than they did in June 2024.

You can see manufacturing-heavy Wisconsin was among those losers, with 7,777 jobs lost in that time period. That’s been a constant story since mid-2023, when the Fed finished its tightening phase, putting interest rates at their highest levels in 22 years in order to deal with 2021’s and 2022’s inflation spike.

Bad signs all around, and now I’m going to give you an even more alarming one. Remember what the jobs growth chart looked like from 2023 to 2025? Here’s another one that looks like that.

So you could say the US jobs market was sputtering in the first half of 2025 like we were at the end of 2007 and early 2008. And it’s worth noting that US unemployment reached its cycle low at 4.4% in May 2007 and had a slow rise to 5.0% in April 2008 before the roof started caving in. For the post-COVID world, we started rising from a lower point (3.5%), but were still down at a 4.0%-4.2% plateau between June 2024 and June 2025, before unemployment began its current rise from 4.1% in June of this year to 4.6% by November. Uh oh.

I think officials at the Federal Reserve see these echoes of the end of the Bush Presidency as well, and they would rather get out ahead of the recession that the 2025 jobs market is pointing toward. And just like how the Fed started cutting interest rates in mid-2007 from its peak, central bankers started cutting from a similar level in September 2024 this time around. Today, the Fed Funds rate is at similar levels to early 2008.

But all the rate cuts in 2007 to 2008 weren’t enough to keep the Bubbles from popping, and the end of job growth and lack of real economic activity ended up wrecking the false front that the late 2007 economy had. Uh oh again.

One major difference – core inflation (less food and energy) was never above 2.5% even as the rate cutting was going on in mid-2007 and throughout 2008. Yes, gas spiked (remember $4+ gas in Summer 2008? I sure do), which surged total inflation past 4% in late 2007 and up to 5.5% by mid-2008. But core inflation never really did, and core inflation is higher is higher in 2025 (even with the alleged decline to 2.6% that we saw in November’s flawed report). And today it is food prices that threaten to have overall inflation run higher this time, instead of gas prices.

Doesn’t it kind of feel like 2007-08 in the sense it feels like things aren't going well and the economy doesn’t have any real growth engine in it, but on the surface, things don’t seem too screwed up yet? And it only takes one more kink in the chain to cause a lot of bad things to accelerate.