Labor Market Analysis - The labor market is showing signs of weakness, with some indicators suggesting conditions near recession levels [1][3] - Employment growth appears to be close to zero, potentially stabilizing at pre-shutdown levels [5][6] - Job openings and hiring are weak and potentially weakening, as indicated by Indeed numbers [6] - Layoff announcements, as summarized by the Challenger measure, are raising concerns [7][10] Economic Outlook - GDP is considered "doing okay" at 36%, but is distorted by front-loading effects and changes in inventories [8] - The labor market numbers are considered a more reliable measure of the economy's current state than GDP [9] Inflation and Monetary Policy - Inflation numbers have been generally encouraging, despite the pass-through from tariffs [13][14] - The analyst remains comfortable with the expectation of a Federal Reserve rate cut at the December meeting [15] Technology Impact - There is a potential for a more significant and quicker impact from AI on the labor market than previously anticipated [11][12]

Market Overview - Pre-market trading has declined, reflecting a cautious sentiment towards AI infrastructure spending and a lack of economic data, particularly during what was expected to be Jobs Week [1] - The market has seen a downward trend over the past five days, moving away from all-time highs reached in late October [1] Employment Data - Non-farm payroll numbers from the U.S. Bureau of Labor Statistics (BLS) are unavailable due to a government shutdown, with estimates suggesting a loss of 60,000 jobs last month [2] - The unemployment rate is expected to rise to 4.5%, while hourly wages are anticipated to remain steady at a year-over-year increase of 0.3% [2] - ADP reported an addition of 42,000 new jobs, which is better than BLS estimates but still indicates a weak labor market [3] - The Challenger Job Cuts report indicated 153,000 job cuts, highlighting ongoing challenges in employment [3] Interest Rate Expectations - There is a tentative expectation for a 25 basis-point interest rate cut in approximately 4.5 weeks, although market indexes may have already priced in this cut [4] - The "neutral rate" of inflation is uncertain but is believed to be higher than the optimal 2% [4] Earnings Reports - Wendy's (WEN) reported Q3 earnings of $0.24 per share, exceeding expectations by 20%, leading to a 9% increase in shares [5] - Six Flags Entertainment (FUN) posted earnings of $3.28 per share, surpassing the consensus estimate by 46.4%, although shares are down 2% in early trading [5] - Fluor (FLR) reported Q3 earnings of $0.68 per share, beating expectations by 54.55%, with shares up 4.6% in pre-market trading [6] - Constellation Energy (CEG) reported earnings of $3.04 per share, falling short of the anticipated $3.13, resulting in a 6.3% decline in shares [7] - Canopy Growth (CGC) shares increased by 12% despite reporting a loss of $0.01 per share, an improvement from the expected loss of $0.10 [8] Consumer Sentiment and Credit - The University of Michigan Consumer Sentiment report for November is expected to show a slight decrease to 53.0 from 53.6, remaining above the neutral threshold of 50 [9] - Consumer credit for September is projected to total $10.0 billion [9]

First, let me give you the jobless claims data. It's gathered individually from the states, seasonally adjusted by Haver Analytics, our data provider, rising by 10,000 on the week. Still a modest 229.You can see that in the next chart. They're rising. It's the top of the range where they've been the past several months, but not really through the roof, though.Continuing claims that keeps edging higher together with that surge in mass layoffs that we reported yesterday from Challenger. Well, that suggests ma ...

We are getting uh the jobless claims data from the US government despite uh the government shutdown and senior economics reporter Steve Leeman joins us with the data and a look at what all the alternative job numbers are telling us and a very firm conclusion about the the state of the labor market we're going to get from Steve I'm I'm told >> thanks for setting me up there Joe uh that's not going to happen I'll do the best I can uh first let me give you the jobless claims data it's gathered gathered individ ...

We are getting some numbers that are pretty important right now. We're going to be looking at the ADP private payroll data. It's just out.Steve Leeman joins us with those numbers. >> Numbers. What a what a what a thought.Fantastic. ADP saying that private payrolls grew by 42,000 in the month of October. Uh with a decent split when it comes to by sector.Goods producing up 9,000, service providing up 33,000. This is a question. Is this the new normal we have to get used to.Is a relatively lackluster number th ...

Core Insights - The lack of federal statistics, particularly on employment and unemployment, is creating uncertainty in assessing the labor market and potential recession risks [2][3][4] - The Federal Reserve's decision to reduce rates is driven by concerns over a deteriorating labor market and slow job creation potentially leading to job contraction and recession [2][4] - Current recession indicators are not reliable due to significant fluctuations in labor supply and participation, complicating the interpretation of unemployment rate changes [5][6] Labor Market Analysis - There is a wealth of private sector data and surveys available, but the absence of core federal data limits confidence in labor market assessments [1][2] - The unemployment rate indicator is currently at 0.1%, well below the recession threshold of 0.5%, suggesting that the economy is not in a recession based on this metric [6] - Changes in labor supply, particularly due to immigration and labor force participation, have historically influenced unemployment rates, making it difficult to draw conclusions about recession status [5][6]

Core Insights - The job market is experiencing an increase in layoffs, particularly in white-collar sectors, with significant layoffs reported by UPS and Amazon, each announcing 14,000 job cuts [1][2] - The equilibrium in the job market has shifted, requiring only 30,000 jobs to be added monthly to maintain balance, down from 230,000 [3][5] - The decline in labor supply growth, largely due to reduced immigration, has contributed to this shift in job market dynamics [4][5] Labor Market Trends - Layoffs are rising to levels comparable to pre-pandemic times, indicating a potential increase in the unemployment rate and further weakening of the job market [2] - The current job market is characterized as a "low, higher, low fire" environment, suggesting a transition towards more layoffs and less hiring [1][2] Impact of Technology - AI is perceived as a job shifter rather than a job destroyer, with new technologies replacing specific tasks rather than entire jobs [6][7] - The impact of AI on job replacement is still modest, as businesses are primarily in the experimental phase with AI technologies [9][10] - While AI can perform certain tasks, it is unlikely to replace the human elements of jobs, such as communication and relationship building, in the short term [14]

Should we start to get concerned that we're seeing really big layoffs, especially when it comes to white collar jobs, and I'm talking about UPS and Amazon here, both 14,000 layoffs and white collar workers. >> So, we have been in a job market that economists have called low, higher, low fire for a year or two now. And I think we're starting to move into an environment that's more low, higher, some fire.So, we're starting to see layoffs tick up to where they were uh compared to prepandemic levels. And the fa ...

Market Overview - The current economy is described as strange, characterized by strong GDP and a soft labor market [1] - History suggests that when the Fed is easing and the economy and earnings are strong, equity returns tend to be favorable, indicating a potentially good environment for stocks [2] Labor Market Analysis - The speed of unemployment rate increase, rather than a specific level, is a key concern for the markets [3] - The overall unemployment level is at 43%, and current state-level data on initial jobless claims does not appear concerning [4] Investment Strategy - The advice is to lean into sectors that are currently performing well [6] - Financials are considered overweight, with expectations of future gains [7] - Despite the momentum in tech, the firm is looking for other ways to play the AI theme, specifically in China [7] AI and Productivity - Since the launch of Chat GPT in October 2022, the stock market is up 70% while job openings are down 30% [10] - There is a potential disconnect between the market's expectation of productivity gains from AI and the current job opening situation [11] - Increased use of AI tools may lead to meaningful public policy conversations about income redistribution [13] China's AI Approach - China offers a cheaper and less crowded way to invest in the AI theme [8] - China's AI approach focuses on efficiency and immediate applications, contrasting with the US focus on building the greatest model possible [9]

Market Expectations & Fed Policy - The market anticipates the Fed will cut rates, pricing in a near certainty for a quarter-point cut, despite limited official jobs data due to a government shutdown [1] - Some anticipate a potential for 50 basis points (0.5%) of cuts tomorrow, although this is not a widely held view [3][4] - The market is betting that job cuts will prompt Fed cuts through the end of the year, with major indices setting intraday records [2] Employment Market & Layoffs - Amazon is officially cutting 14,000 jobs, and UPS has slashed payrolls by 48,000 this year, joining other companies like Target, Meta, and Starbucks [1] - The unemployment rate is expected to increase measurably over the next couple of quarters [3] - Corporate job cuts are a concern, particularly regarding their impact on consumer spending [7] Economic Indicators & Data - The absence of a month's worth of economic data due to the shutdown makes it difficult to assess the current economic situation [5] - Regional Fed surveys offer some insight into the economy [6] - Traditional measures of the relationship between the unemployment rate and the rate of change in the unemployment rate may not be reliable in the context of AI [6] Company Specific Analysis - UPS layoffs are attributed to a reversal of the pull-forward in goods demand experienced during the pandemic [8] - Amazon's layoffs are seen as a way to maintain capital discipline and continue investing in areas with the highest potential ROI, such as Nvidia and capex spend [9] - Companies may be cutting jobs to make gains in productivity [10]