Although the U.S. unemployment rate remains historically low at 4.2%, underlying weakness in the job market is flashing red. Continuing unemployment claims are on the rise, college grads face record jobless rates, and corporate layoff announcements are accelerating. At the same time, AI-driven automation is replacing jobs across sectors, and erratic tariff policies are dampening business investment and hiring.
Consumer spending, which fuels 70% of the U.S. economy, is also showing cracks. Delinquencies on credit cards, auto loans, and student debt have surged—reaching post-2008 highs—as households rely increasingly on credit to maintain their lifestyles amid sticky inflation.
This report explains why employment is a lagging economic indicator, how the Fed’s slow response could trigger a vicious cycle, and what investors should do now. With equity valuations at a premium and volatility looming, CFRA recommends a portfolio rebalancing strategy emphasizing high-quality bonds and adequate cash reserves.
What You Will Learn
- Why rising jobless claims and soft payroll growth suggest labor market weakness
- How AI is displacing white-collar roles, especially among young workers
- Where consumer spending cracks are forming—and why they matter
- Why equity markets may be vulnerable given stretched P/E ratios
- How to structure a resilient portfolio with bonds, cash, and high-quality equities
Get the Full Economic Picture—Before the Market Reacts
Download the full CFRA report to better understand the hidden weaknesses in the labor market and consumer spending.