A weaker-than-expected monthly jobs report has raised concerns among some investors, but one market strategist says the broader indicators suggest the U.S. economy remains resilient.
James Perry, founder and chief investment officer of Perry International Capital Partners, said the headline figure showing a loss of 92,000 jobs in February does not tell the full story about the state of the labor market.
“The economy is actually doing pretty well,” Perry said. “When you step back and look at unemployment, wages, and productivity, the overall picture is still relatively strong.”
According to Perry, the unemployment rate holding steady at 4.4 percent indicates that most Americans who want to work are able to find jobs. He also noted that the overall size of the U.S. labor force continues to grow and remains near historic highs.
“The labor force in this country has never been larger,” Perry said. “And it has never been making more money than it is now.”
Recent data shows average hourly wages have risen more than 3.5 percent over the past year, with manufacturing workers seeing even stronger increases. Weekly earnings in factory jobs are climbing at more than 5 percent annually, reflecting continued demand for industrial labor.
Perry said another important trend shaping the labor market is the growth of small businesses, which historically account for the vast majority of job creation in the United States.
“About 80 percent of job growth every year comes from small businesses,” Perry said. “Right now we’re seeing a significant increase in new small businesses being created.”
That surge in business formation suggests entrepreneurs remain confident enough in the economy to start new ventures and hire workers.
Still, Perry acknowledged that the economic outlook is not uniformly positive. Rising costs of living remain a major concern for many households, and he said affordability pressures could become a central political issue in upcoming elections.
“If there’s one issue that resonates with the middle class, it’s affordability,” Perry said. “That’s the narrative that could drive political outcomes.”
Another factor shaping the future labor market is the rapid expansion of artificial intelligence and automation technologies.
Several major companies, including Amazon, Oracle, and Morgan Stanley, have recently announced layoffs tied in part to efficiency improvements driven by new technology.
While those announcements generate headlines, Perry said the overall impact on employment remains limited for now.
“These numbers are still relatively small in the context of the entire workforce,” Perry said.
He added that AI is likely to shift jobs rather than eliminate them entirely. Many companies are creating new positions related to artificial intelligence even as they reduce staffing in other departments.
Retail giant Walmart, for example, has expanded its AI-related workforce significantly while maintaining stable overall employment levels.
“What you’re seeing is more of a redistribution of labor,” Perry said. “AI is increasing productivity, and in many cases that leads to higher wages over time.”
Despite concerns about technological disruption, Perry said the current unemployment rate remains far below levels typically associated with recessions.
“You don’t usually see a recession when unemployment is below five percent,” he said.
While the domestic economy shows signs of stability, Perry said geopolitical developments could pose significant risks to markets in the coming months.
Tensions in the Middle East, particularly involving Iran and global oil supply routes, have already caused energy prices to spike.
Oil briefly surged above $100 per barrel in recent trading, a dramatic increase from levels seen just weeks earlier.
“When oil prices double in a short period of time, historically that has often preceded recessions,” Perry said.
One of the most significant concerns is the potential disruption of shipping through the Strait of Hormuz, a narrow passage that carries a large share of the world’s oil exports.
Even a single drone or missile strike on a tanker could halt shipping traffic temporarily and send energy prices higher, Perry said.
“All it takes is one drone hitting one ship to create a major problem,” he said.
Despite those risks, Perry believes financial markets are currently betting that the geopolitical situation will stabilize within the next several weeks.
Credit markets, interest rates, and equity prices suggest investors expect tensions in the Middle East to ease rather than escalate into a prolonged conflict.
If that outlook proves correct, Perry said the broader economic trajectory for the rest of the year could remain relatively positive.
Still, uncertainty has prompted him to adjust his investment strategy.
Perry said he has reduced some stock holdings and increased cash reserves in recent months while maintaining positions in sectors that could benefit from rising defense spending.
“I’ve raised my cash position and increased exposure to defense stocks,” Perry said. “Given the geopolitical situation, those sectors have been performing very well.”
At the same time, he noted that the U.S. stock market has broadened beyond the handful of technology giants that previously dominated market gains.
Companies in industries such as manufacturing, transportation, and consumer goods have also reached record highs, suggesting a wider base of economic growth.
“That broadening out of the market is a very positive sign,” Perry said.
Even so, Perry emphasized that the biggest factor shaping the economic outlook for the rest of the year may not be domestic policy or labor market data.
Instead, he said, global stability — particularly in energy markets — will likely determine whether the current expansion continues.
“The real story right now isn’t the jobs report,” Perry said. “It’s what happens in the Middle East and how that affects oil and global trade.”