The April jobs report showed the US labor market isn’t rapidly cooling. But some on Wall Street still think an economic slowdown is likely underway, even if it’s not showing up in mass layoffs or a large pickup in the unemployment rate.

“Unless there’s some quick reversal on tariffs, the amount of disruption we’re seeing there, along with every other force being imposed on the economy right now, probably will drag us under in terms of putting us into recession,” JPMorgan Asset Management chief global strategist David Kelly told Yahoo Finance.

On May 2, the latest labor report from the Bureau of Labor Statistics showed the US economy added 177,000 jobs in April, well above the expectations for 138,000, while the unemployment rate held flat at 4.2%. Economists largely agreed that the headline numbers in April were solid. But within the details of various data points, Kelly and others already see signs of slowing in the economy.

For one, hiring remains low. The latest Job Openings and Labor Turnover Survey (JOLTS) revealed the hiring rate ended March at 3.4%. When excluding the pandemic, the hiring rate is hovering near its lowest levels of the past decade, putting the labor market on thin ice to avoid a slowdown.

“If enough people just decide to hesitate a little bit about hiring, that could put you in the soup anyway,” Kelly said. “We haven’t seen, and you don’t need, a big increase in layoffs. You just need a hesitation to hire that gets you into real trouble.”

Corporate layoff announcements have trickled in over the past month, with UPS (UPS) cutting 20,000 jobs among them. But broad government layoff data has only shown a modest increase in recent weeks, leaving economists to search for other signs of cooling in the labor market.

Renaissance Macro head of economics Neil Dutta, who also has projected the US economy will enter recession, highlighted that even in a strong April labor report, there were still signs of softness. For instance, average hourly wages increased 0.2% in April compared to the month prior, in line with the lowest monthly increase seen since 2023.

Dutta points out that the wage increases for private industries are now below the fed funds rate, a phenomenon not often seen outside of recessions.

“Historically, that is never a good place to be,” Dutta wrote in a note to clients, noting that slowing wage growth is one sign that the labor market is already cooling and the Fed should be cutting interest rates soon to aid the slowing economy.