Analyst Says Status Of U.S. Workers Won’t Improve In Next 5 Years

As the U.S. labor market shows clear signs of stalling, one of Wall Street’s leading strategists is sounding a sharp warning: With America’s workforce in a demographic crunch and historic changes in immigration policy underway, it is “quite possible that the next five years will see no growth in workers at all,” Mick Lichtenberg reported for Fortune.

The unemployment rate ticked up to 4.2% in July.

The implications, according to David Kelly, chief global strategist at JPMorgan Asset Management, are profound for the Federal Reserve and investors—chief among them, the need for exceptional caution before lowering interest rates.

Kelly used his regular Notes on the Week Ahead research note to survey the implications of Friday’s shocking jobs report, which revised downward job creation in May and June by a combined 258,000 jobs.

Employers added just 73,000 jobs in July, well below the consensus estimate of 110,000. This left the average monthly increase for the past quarter at a mere 35,000 jobs.

The unemployment rate ticked up to 4.2% in July, as both employment numbers and labor force participation slipped further.

Kelly also highlighted signs of tightness in the labor market, namely the decline in the labor force participation rate (LFPR) from 62.65% in July 2024 to 62.22% in July 2025.

That equates to almost 1.2 million fewer people aged 16 and over who are working or actively looking for a job. He attributed about half of this decline to Americans aging into retirement, but noted that the participation rate has also fallen among those aged 18 to 54.