Barclays_Global_Macro_Thoughts_A_week_for_the_ages

Restricted - ExternalSIGNATURE4 August 2025Global Macro ThoughtsA week for the agesAjay Rajadhyaksha+1 212 412 7669ajay.rajadhyaksha@barclays.comBCI, USMax Kitson +44 (0) 20 3555 2386 max.kitson@barclays.com Barclays, UK Pratham Hukmat Kingar +91 (0) 22 6175 2018prathamhukmat.kingar@barclays.comBarclays, UK Where noted in the source notes, the views expressed within this report are taken from previously published research. For further detail, including important disclosures and analyst certifications, please follow the links on each page and on page 8.This document is intended for institutional investors and is not subject to all of the independence and disclosure standards applicable to debt research reports prepared for retail investors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for its own account and on a discretionary basis on behalf of certain clients. Such trading interests may be contrary to the recommendations offered in this report.Please see analyst certification(s) and important disclosures at the end of this presentation.FICC ResearchGlobal MacroRestricted - ExternalCompleted: 04-Aug-25, 09:07 GMT Released: 04-Aug-25, 09:11 GMTRestricted - ExternalThe world at a glance•Job growth in the US seems to have hit a wall in recent months •A new round of tariffs, but not a big change in the effective rate •The BLS head gets fired, and a Fed governor resigns •Big Tech earnings – on average – continue to positively surprise •Making sense of it all4 August 20252Restricted - ExternalSo the job market was facing a supply shock after all4 August 20253•The revisions now paint a drastically different picture of the job marketoThe 3mma of payrolls is now down to just 35k, from over 125k last monthoThe biggest negative revisions were in government payrolls, now 49k lower over three months•We have been expecting the jobs market to face an immigration-related supply shockoBut across 2025, the 3mma of payrolls ran at healthy levels (125-150k), and U3 didn’t falloAfter the revisions, it now seems far more likely that a supply shock is starting to occur•The US jobless rate – despite sharp downward payroll revisions – is roughly at levels of 12m agooJobless claims have remained extremely low this entire cycle; the last print was just 218koOther measures of slack (quits rate, opening-unemployed ratio) have also moved sidewaysoThis suggests that the labor market is not very off balance – just at lower levels of job creation •Chair Powell warned of this in Wednesday’s hawkish press conferenceoHe argued that ‘the main number … look at … is the unemployment rate’oHe noted that the ‘breakeven number’ had come down; the jobs market was ‘in balance’ with fewer jobs1 Global Economics Weekly: The economic consequences of the deal (1 August 2025)Restricted - ExternalA hawkish Fed followed by a soft NFPPayroll job gains through July alongside revisions suggest moderation in the labor marketU3 and U6 both increased in July, amid ho