Girard: The labor market may be weakening, but wage growth is slowing too

Labor Market Trends - Recent weeks have seen a number of layoffs, including IBM cutting a low single-digit percentage of its workforce, equating to thousands of people [1] - ADP data suggests a reversal of job losses seen through September, with an estimated average of 14,000 jobs being added per week through late October [3] - Challenger data from early October indicates over 940,000 job cuts announced year-to-date, the highest since 2020 [4] Factors Influencing Hiring - Firms have been concerned about the economic outlook, leading to a pause in hiring over the summer [6] - There is concern and uncertainty about the impact of AI on the workforce and future staffing needs, leading to more caution in hiring [7][9] - Inflation continues to persist, although it hasn't risen as much as expected due to tariffs [11][12] Wage Growth and Inflation - A weakening labor market could impact wage growth, which is considered a core component of inflation [12][13] - There is some slowing in wage numbers, which could reduce the risk for the inflation outlook [14] Unemployment Claims - Initial unemployment claims from states are not showing a significant uptick, despite layoff announcements [8]