Payroll Panic? Prediction Markets Bet on a Soft Landing
What $12 million in prediction-market bets say about recession fears an job market crash
It’s jobs-day Friday (Aug 8 2025), and every news in the starting block for the 08:30 ET print is warning of layoffs and an economic stall. But the traders who back their views with cash see something else entirely.
Follow the money, not the headlines: markets give only a 14 % chance of a 2025 recession and a 96 % chance unemployment merely edges above 4 %. Here’s what smart money is pricing in.
1 · Labour-Market Resilience: Betting Against the Bear
Recession odds for 2025 sit at just 14 % on Polymarket, backed by nearly $9 million in volume.
Kalshi’s “Recession This Year?” contract is even lower at 11 %.
Traders price a 93 % chance that August payrolls print above zero and a 96 % probability unemployment only ticks just past 4 %—hardly cliff-edge territory.
2 · The Skill-Shift Boom: Wages and AI Take Centre Stage
A 56 % chance of inflation staying above 3 % in 2025 signals sticky wage pressure, not labour slack.
Heavy wagers on NVIDIA (62 % odds of ending 2025 as the world’s largest company) and Google’s AI dominance are de-facto bets on AI-driven productivity—a scenario that requires skilled workers, not mass layoffs.
3 · Policy & Rates Wildcards: The Fed’s Measured Path
76 % probability of a single 25-bp cut after the September FOMC meeting; only 8 % odds of an emergency cut.
Plurality odds (38–40 %) on exactly two cuts in 2025 suggest a glide-path, not a panic pivot.
Just 12 % probability of Jerome Powell leaving the chair—continuity trumps chaos.
Data Snapshot: Money-Weighted Odds
The Takeaway
Optimism isn’t denial; it’s recognising adaptation in real time. Prediction-market money says the labour market bends, not breaks. Watch sector-level employment and the odds table above—both are better truth-meters than the loudest headline.
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