The Jobs Report Shows a Labor Market in Big Trouble

US Labor Market Weakening [00:00]

• The latest jobs report indicates a continuing decline in the US labor market.
• October saw a net loss of 105,000 jobs, while November saw a gain of 64,000 jobs.
• The trend over the past six months shows a significant worsening, with job losses in three of the last six months.
• October was a particularly bad month, with over 100,000 jobs lost.
• Initial job figures are often revised downward, and Federal Reserve Chair Jerome Powell suggested job figures may be overstated by as much as 60,000 jobs per month.

"And the US labor market lost 105,000 jobs in October and gained 64,000 jobs in November."

Unemployment and Wage Stagnation [01:39]

• The unemployment rate has risen to 4.6%.
• Federal Reserve Chair J. Powell considers the unemployment rate the most critical labor market data point.
• Wages are growing at 3.5%, significantly lower than the current inflation rate of approximately 6%.
• This disparity means most Americans are experiencing a pay cut, and a raise of less than 6% is effectively a pay reduction.
• The speaker anticipates inflation will sharply accelerate in 2026 due to the Federal Reserve restarting money printing.

"That means that wages are not keeping up with inflation. This means that most Americans continue to see pay cuts in 2025."

Money Supply and Inflation Concerns [03:41]

• The money supply has reached an all-time high, according to data from the Federal Reserve.
• Recent annualized growth of the money supply is approximately 5%, with expectations of reaching closer to 6% due to renewed money printing and interest rate cuts in Q4.
• The Consumer Price Index (CPI) report measures the change in the cost of living, not price inflation itself, which the speaker argues is a distinct and more severe issue.

"The CPI inflation report does not measure the change in prices. The CPI inflation report does not measure price inflation. The CPI inflation report measures the change in the cost of living, which is a completely different thing."

Surge in Job Cuts [04:25]

• Job cuts from January to November have increased by 54% year-over-year, totaling 1,170,821 announced cuts.
• Top reasons for job cuts in November include restructuring (20,000+ jobs lost), store closings (217,000 jobs lost), artificial intelligence (6,280 jobs lost in November, 54,694 year-to-date), market and economic conditions (15,755 jobs lost in November), and downstream effects.
• Industries experiencing the most job cuts in November include media, nonprofit organizations, retail, services, food companies, tech companies, and telecommunications.
• Verizon is cited as an example of a telecommunications company implementing significant job cuts due to restructuring.

"From January 2025 through November of 2025, employers have announced 1,170,821 job cuts. Again, that's up by 54% compared to January through November of 2024."

Impact on Interest Rate Cut Odds [07:32]

• The odds of the Federal Reserve cutting interest rates at the January 28th meeting remained at 24.4% before and after the jobs report release.
• The market may have shrugged off the report, or there could be a lag in the CME Fed watch tool's data updates.
• The Federal Reserve's Summary of Economic Projections forecasted only one interest rate cut of 0.25% for 2026.
• However, the speaker anticipates more significant rate cuts in 2026, especially with a new Fed chair potentially taking power in May 2026.

"Now, after the release of the jobs report, the odds did not change. They stayed exactly the same."