Apollo warns that job market weakness may be on the horizon

[Jobs wording inside of Magnifying glass on an blue background]
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Apollo Global Management’s chief economist, Torsten Slok, is cautioning that the U.S. labor market may be heading into a softer patch, with early signs pointing to weaker hiring momentum in the months ahead. His remarks come as investors await Friday’s closely watched August payrolls report.

Slok points to two sentiment-driven signals that have historically foreshadowed changes in employment trends. The first is consumer sentiment around job prospects. He notes that public perceptions about the labor market often lead actual payroll figures. Based on this relationship, current readings suggest August nonfarm payrolls could undershoot the consensus forecast of 90K new jobs.

The second warning flag comes from small business surveys. A growing share of firms report declining sales, a trend that has previously correlated with rising unemployment. This data, Slok argues, may indicate that joblessness could climb in the coming months if weaker demand pressures employers to cut staff.

“The bottom line is that sentiment indicators are suggesting that the labor market will continue to weaken,” Slok said.

With markets already on edge over the economic outlook and the Federal Reserve’s next policy steps, Friday’s jobs report is shaping up to be a pivotal gauge of whether the slowdown is beginning to take hold or not.

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