Enzac Research: The Illusion of Stability – Decoding the NFP Mirage and Looming Market Fractures
- Globbie Lo
- Jun 7
- 2 min read

The June NFP beat (139K vs. 130K expected) has sparked a risk-on rally, but beneath the surface, our proprietary data reveals dangerous fault lines: slowing job quality, tariff distortions yet to hit, and a Fed trapped between phantom inflation and political pressure. This is not a healthy labor market—it's a last gasp of the pre-tariff economy masking systemic vulnerabilities.
Core Analysis: Three Hidden Truths Behind the Headlines
1. The "Quality Collapse" in Job Growth
While headline NFP beat, our Labor Market Health Index (LMHI) shows alarming deterioration:
Downward revisions dominate: -95K net revisions over past 2 months
Part-time jobs surge: 62% of new jobs are part-time (vs. 48% pre-tariff)
Wage growth illusion: 0.4% MoM rise driven by management layoffs skewing averages (low-wage jobs growing 3x faster than high-wage)
Enzac Insight: This is stagflationary compression—higher wages per worker but fewer productive roles.
2. The Tariff Time Bomb
Markets are ignoring the 90-day lag effect of Trump's tariffs:
May NFP captured only 2 weeks of tariff impacts
Our Supply Chain Stress Indicator shows 47% of manufacturers plan layoffs in June-August
Bond market disconnect: 10Y yields rose post-NFP, but our Policy Uncertainty Gauge shows institutional investors are quietly loading up on long-dated Treasuries
3. The Fed's Impossible Trinity
The Fed faces three incompatible goals:
Fight inflation (tariff-driven CPI incoming)
Support growth (credit spreads widening since May)
Avoid political backlash (Trump attacking Powell daily)
Our Model Shows: Fed has 17% chance of cutting by September without triggering a dollar crisis.
Proprietary Indicators Flash Warning Signs
Metric | Current | Pre-Tariff | Threshold |
Job Growth Quality Score | 58/100 | 72/100 | <60 = Recession Signal |
Tariff Impact Lag (Days) | 42 | N/A | >60 = Full Effect |
Fed Policy Credibility Index | 6.2/10 | 7.8/10 | <6.5 = Market Stress |
Market Implications: The Coming Regime Shift
Equities: Rally is short-covering driven—our Positioning Radar shows institutional flows still negative YTD.Treasuries: Bear flattening is a bull trap—real money accumulating 20Y+ bonds.Crypto: Bitcoin's 67% correlation to liquidity proxies suggests Q3 breakout as Fed pivots.
Actionable Trades:
Short S&P 500 vol (VIX <15 is unsustainable with tariff cliff ahead)
Long 20Y Treasury calls (yields peak by July)
BTC accumulation zone: $60K-$62K
The Enzac Edge: What Others Miss
"Ghost Jobs" Phenomenon: 22% of NFP gains are unfilled positions (pre-tariff: 9%)
Shadow Unemployment: Our adjusted rate (including gig workers) is 5.8% vs official 4.2%
Fed Blackout Blindspot: Next CPI release will shock markets with tariff passthrough
Conclusion: The Calm Before the Storm
This NFP print is the last "clean" data before tariff chaos hits. By August, we expect:
NFP <100K
CPI >4% YoY
Fed forced into emergency hike
Enzac clients are positioned for:
Defensive equity rotation (healthcare/utilities)
Steepener trade unwind
Crypto as macro hedge
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