ADP: +37K jobs.
Wall Street: “It’s trade wars.”
Media: “Wait for the BLS.”
Me: You’re watching the wrong indicators.This isn’t about tariffs.
It’s about spending freezes, long tail of overhiring, and labor hoarding in disguise.Everyone’s asking “When are the layoffs?”
They’re…— Amanda Goodall (@thejobchick) June 4, 2025
BREAKING: Stock market is pricing in Trump's tariffs as one big bowl of nothing; that he and Bessent will negotiate them down to a meaningless level. If that's the case, Trump would have wasted months of political capital and our trade relations are back to square one, though the…
— Charles Gasparino (@CGasparino) June 4, 2025
So few people understand this.
Once mortgage rates drop the housing market is going to tank.
Too many people think it’s the opposite and will learn the hard way. pic.twitter.com/29SwSbUm89
— QE Infinity (@StealthQE4) June 4, 2025
How long before this goes negative? 👇🏼 https://t.co/vbjbM9KOxu
— Kalani o Māui (@MauiBoyMacro) June 5, 2025
The warning signs are everywhere. Mass layoffs are sweeping across industries, mortgage rates remain stubbornly high, and bond markets are showing signs of deep instability. The housing market, already under pressure, could be on the verge of a major correction.
The numbers tell the story. Over 250,000 jobs were cut in the first quarter of 2025, with tech, finance, and manufacturing seeing the largest reductions. The unemployment rate has climbed to 4.8 percent, the highest in three years. As more workers lose their income, homebuyers are pulling back, leading to a slowdown in demand.
Mortgage rates remain a major obstacle. The average 30-year fixed rate sits at 7.2 percent, making homeownership increasingly unaffordable. The Federal Reserve has signaled that rate cuts are unlikely in the near term, meaning borrowing costs will remain elevated. Homeowners who locked in lower rates years ago are hesitant to sell, further tightening inventory.
Bond markets are flashing warning signals. The yield curve remains inverted, a classic recession indicator. Investors are fleeing riskier assets, pushing Treasury yields higher. This instability is making it harder for banks to lend, further restricting credit availability.
The housing market is already feeling the strain. Pending home sales have dropped 12 percent year-over-year, and price growth has stalled in major metro areas. Cities like Austin, Phoenix, and San Francisco are seeing price declines as sellers struggle to find buyers.
Sources:
https://www.newsweek.com/recession-housing-market-mortgage-rates-price-trump-tariffs-2043195
https://www.noradarealestate.com/blog/why-americans-fear-a-major-housing-market-crash-in-2025/