Trump’s “Made in America” pivot faces its biggest test as Goldman sees job losses return

Despite the ongoing data blackout caused by the U.S. government shutdown, Goldman Sachs economists are warning of a sharp slowdown in job creation, underscoring the challenges facing the Trump administration’s economy as it pivots toward domestic production.

Goldman’s internal tracking model estimates that job growth slowed to 85,000 in September and fell further to around 50,000 in October - the weakest pace since 2020. However, the actual numbers could be much worse.

“Incorporating the impact of the government deferred resignation program, we expect official nonfarm payrolls to decline 50k in October,” wrote David Mericle, Goldman’s chief U.S. economist, noting the potential for the first negative payroll figure in several years.

The bank’s layoff tracker also suggests that the unemployment rate could rise gradually over the next six months, reaching around 4.5% in its base-case scenario, up from the current 4.3%.

Separately, RSM chief economist Joe Brusuelas said the job market is likely to continue softening into 2026 as companies accelerate AI-driven efficiency measures. He warned that many firms are now “poised to shed labor” as automation replaces certain functions.

That assessment aligns with recent InvestorsObserver reporting, which found early evidence that AI adoption is displacing white-collar, entry-level roles - a trend highlighting the widening disconnect between rising GDP and corporate earnings and a slackening labor market.

A deal is reached to end the government shutdown

A potential silver lining emerged as Democrats and Republicans reached an agreement in principle to end the ongoing government shutdown - a move that would allow the Bureau of Labor Statistics (BLS) and other federal agencies to resume normal data releases.

Since the shutdown began on Oct. 1, key economic reports, including the official nonfarm payrolls figures, have been delayed. In the absence of government data, investors and analysts have relied on private-sector estimates to gauge the health of the U.S. labor market.

While government shutdowns have historically had limited impact on Wall Street, investor anxiety has begun to build as major U.S. airlines canceled or delayed thousands of flights amid a shortage of air traffic controllers. The disruption has affected millions of passengers and added to broader concerns about economic strain.

That unease has started to show up in the markets: the Nasdaq Composite Index recently recorded its worst week since April, reflecting growing uncertainty among investors.

As InvestorsObserver reported, policymakers were racing to strike a deal before the holiday season, when the shutdown’s impact could have worsened significantly. The nation’s largest airlines warned that prolonged disruptions could affect more than 10 million passengers through widespread delays and cancellations.