Excess Returns · Friday, August 14, 2026
Jim Paulson highlights a significant downturn in the US labor force, noting it has been flat since 2024 and showing a decline in participation rates, particularly among 25-54 year olds. He also points to weak payroll reports and a high average duration of unemployment as indicators of broader economic weakness tied to the consumer.
“US labor force here in this chart is clearly rolled over in a big way. You just don't see that type of move in the labor force, uh, outside of recessions. It's basically been flat now since 2024, which is pretty amazing.”
“Uh, participation rate is off 1.1% from its high, uh, is, you know, it's not just retirees, like old guys like me, although I'm sure I'm part of it, but it's, uh, it's, uh, six-tenths of a percent decline in the core participation rate of 25 to 54-year-olds.”
“Uh, so, you know, there's just a lot of weakness on the jobs market. Indeed, it picked up a little bit for a couple months. It has given that back.”