US Payrolls and 2026 Recession Risk Analysis

This document is a report that discusses the current state of US payrolls and the potential risk of a recession in 2026. It outlines how US payrolls have flatlined since 'Liberation Day' in April and presents three reasons indicating that nonfarm payrolls may be in worse shape than they appear. The report details how uncertainty in hiring confidence, influenced by tariff and immigration policies, along with tight monetary policy, has negatively impacted job growth. It also examines the role of seasonal adjustment factors in presenting payroll data and discusses upcoming revisions that could reveal a weaker job market. The analysis includes specific payroll statistics for November and October, highlighting downward revisions and the implications for the labor market. The report concludes by addressing the Federal Reserve's potential reactions to the current economic conditions and the challenges posed by policy decisions leading up to the midterm elections.