Apollo’s Slok pushes back on the cooling labor market narrative

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Apollo Global Management’s chief economist Torsten Slok is pushing back against expectations of a cooling U.S. labor market, arguing that economic momentum remains stronger than consensus forecasts suggest.

While Wall Street anticipates September nonfarm payrolls will rise by only 50,000, Slok contends that outlook underestimates the economy’s resilience.

Slok points to several signs of underlying strength. Measures of trade and policy uncertainty have eased, consumer confidence about future business conditions is improving, and fewer households express concern about job losses. Corporate spending plans are picking up, while initial jobless claims remain near historically low levels.

Furthermore, Slok spotlighted that high-frequency indicators add to the positive picture: TSA data show robust air travel, attendance at Broadway shows and movies remains solid. Weekly reports also show firm retail sales, accelerating bank lending, declining bankruptcy filings, and steady new business formation.

The Atlanta Federal Reserve currently estimates third-quarter GDP growth at 3.9%, underscoring Slok’s case that the economy is performing well above expectations. He notes that labor market softness may be more attributable to reduced immigration and the growing adoption of artificial intelligence than to fundamental economic weakness.

At the same time, Slok warns that inflationary pressures remain pronounced. Regional Federal Reserve surveys and ISM services data point to rising prices, while factors such as tariffs, tighter immigration rules, and a weaker dollar add further upside risk.

Against this backdrop, Slok argues the Federal Open Market Committee should be considering additional rate hikes rather than rate cuts, as sustained economic strength coupled with sticky inflation complicates the path for monetary policy.

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