Private payroll losses accelerated in the past four weeks

 There is a lot of concern about the current health of the U.S. labor market.  The market itself has been showing signs of weakening, even with the lack of data being released as a result of the government shutdown.  In the past couple of weeks, ADP has been the source of data regarding the labor market.  They have reported that there was a loss of 13,500 jobs a week in the private company sector over the span of the last four weeks.  As a frame of reference, there was a loss of 2,500 per week in the previous update that was given.  As a result of the government shutdown, there will again not be a lot of data to use for the FED when it meets again in December.  Advocation for a cut has shifted the market to expect a cut to rates in the next month, and there is little data that will be released to alter that expectation.  The Goldman team has said that they believe that there will be two more cuts following the December rate cut, come the new year.

https://www.cnbc.com/2025/11/25/private-payroll-losses-accelerated-in-the-past-four-weeks-adp-reports-.html

The Debate Over Minnesota Welfare Fraud and Somalia

A recent City Journal report claims that money stolen in several large Minnesota welfare fraud schemes may have indirectly reached the Somalia-based terror group Al-Shabaab. Citing unnamed federal counterterrorism sources, the article argues that fraudulently obtained U.S. funds, particularly from Minnesota’s Somali community, are sometimes sent overseas through informal “hawala” money-transfer networks, where Al-Shabaab allegedly takes a cut. The report links this claim to major fraud scandals such as the “Feeding Our Future” case, which has resulted in more than 50 convictions tied to an alleged $300 million pandemic-era scam, along with newer fraud cases involving Medicaid Housing Stabilization Services and autism services. Some former investigators and political figures quoted in the article say the issue has been under-addressed due to political sensitivities around Minnesota’s large Somali population.

Federal prosecutors, however, have not charged anyone in these cases with terrorism-related offenses, focusing instead on large-scale financial theft. Still, former law enforcement officials say that even unintentional remittances can benefit Al-Shabaab because the group taxes economic activity inside Somalia. Critics argue that this creates a risk that stolen U.S. welfare funds could indirectly support terrorism. Others note that the claims rely heavily on anecdotal sources rather than confirmed evidence, showing the need for careful investigation rather than broad assumptions about Minnesota’s Somali community.

https://www.msn.com/en-us/news/us/somali-terror-group-al-shabaab-taking-a-cut-of-millions-in-stolen-minnesota-taxpayer-money-from-welfare-fraud-scheme-report/ar-AA1QR7SD?ocid=BingNewsVerp

End of the "Rip Off" Economy

 This article is focused on how AI is beginning to rapidly reduce the information advantages which was allowing companies to overcharge consumers. AI gives people price comparisons, diagnostic help, and is able to weaken the normal imbalance between customer and consumer. This article reveals that AI is going to help people with identifying quality, make better/more informed choices, avoid hidden issues. Markets are improving but industries such as home repairs, law, or real estate still have a large information gap that costs consumers millions to billions of dollars every year.

AI is already prevalent and working in some apps used to compare prices, report issues, etc. But the article also highlights that business will implement AI which creates a competitive environment for both sides. The "Rip Off Economy" is not gone but is definitely declining as of late. 

https://www.economist.com/finance-and-economics/2025/10/27/the-end-of-the-rip-off-economy

AI Takes Over Holiday Shopping

This holiday shopping season is different because AI has adopted new features to make it easier for people to find and buy perfect gifts. Big stores like Amazon, Target, and Walmart now have smart chatbots acting like personal shopping assistants, helping shoppers sort through gifts, read reviews, and even buy things without leaving the chat. For example, in September, OpenAI launched an instant checkout feature in ChatGPT, letting people buy items from stores such as Etsy without leaving the chat. Amazon also rolled out a tool that tracks price drops and can automatically buy items if they fit someone’s budget, and Google announced an AI assistant that calls stores to check prices or product stock.​

Because these companies invest so much in AI, they are likely to keep pulling ahead of smaller stores. Their technology helps people shop faster, with more choices and confidence, making it hard for small businesses without the same tools to keep up. What kinds of jobs do you think will be most needed as more stores start using AI shopping assistants?

Read the article here: https://www.nytimes.com/2025/11/25/technology/chatgpt-holiday-shopping.html

Delayed September Jobs Report Expected to Show Continued Weak Growth

Website: https://www.morningstar.com/economy/delayed-september-jobs-report-expected-show-continued-weak-growth

The September jobs report was delayed because of the government shutdown, but economists forecast it will show only about 50,000 new jobs added and the unemployment rate holding steady at around 4.2%. A majority of these jobs were in the healthcare sector. This data suggests that although the labour market is not collapsing, its strength is clearly diminishing and growth remains weak.

Using the IS-LM framework, this weaker job growth and stable unemployment rate imply a leftward shift of the IS curve. Lower job creation means less income and consumption, reducing aggregate demand. Meanwhile, if the central bank reacts by easing monetary policy, the LM curve shifts right. This puts the new equilibrium at lower output. This framework aligns with the article's predictions. 

Why the Fed May Pause Rate Cuts: Hammack Warns Inflation Is Still Too High

This week, Cleveland Federal Reserve President Beth Hammack suggested that the Fed may slow or pause its plans to cut interest rates because inflation is still too high. In a recent report from Reuters, she said that current interest rates are only “barely restrictive,” meaning they may not be high enough to keep inflation moving toward the Fed’s two percent goal.

Hammack warned that lowering rates too quickly could undo the progress made so far. Her comments go against what many in the financial markets were expecting, since some investors thought the Fed might cut rates again soon, possibly in December. Her message suggests the Fed wants to be more careful and avoid making inflation rise again.

If the Fed decides to wait before cutting rates further, borrowing costs like mortgage rates, car loans, and credit-card interest may stay high for a bit longer. Inflation is still a major concern, and the Fed wants to make sure prices continue to cool down before taking big steps.

Hammack’s comments do not guarantee that the Fed will pause rate cuts, but they show that future decisions will depend on stronger proof that inflation is easing. For now, the path toward lower interest rates remains uncertain.

Fed's Hammack leans against more rate cuts because of high inflation

Stock investors are buoying the economy. A labor market breakdown could end that

Elevated stock market returns have helped lift sentiment among wealthy Americans, who now feel more confident about their finances and the economy. However, economists are warning that this confidence is fragile because the labor market is showing signs of weakening. While equity prices remain strong, a drop in hiring, slower wage growth, or higher unemployment could quickly shake investor and consumer confidence. The piece also notes that if stock-driven optimism is not backed by a healthy jobs market, the risk of a broader economic or market correction increases. Stocks are buoying wealthy sentiment for now, but the underpinning labor-market strength is at risk and could pull that confidence away.

https://www.cnbc.com/2025/11/11/stocks-are-buoying-wealthy-sentiment-a-labor-market-break-could-end-that.html

European Markets – “Waves of Trade & Sentiment in the EU”

 

The markets across Europe have recently been showing a cautious optimism. Stock indices like the Euro Stoxx 50 and the major national markets are up around 1%, helped by hopes that global tensions might ease and by better investor mood. At the same time, the economic backdrop remains tricky: the European Central Bank (ECB) has flagged that future decisions will depend heavily on incoming data because growth is weak and uncertainty is high. 

What this means is even though markets are zooming up a bit, many European companies are still dealing with slower exports, rising costs (especially energy), and trade shifts. So, while it’s a better mood, the economy hasn’t fully recovered and markets remain on alert for anything unexpected.

https://www.investing.com/markets/europe?utm_source=chatgpt.com

https://www.theguardian.com/business/live/2025/jul/24/lloyds-uk-economy-deterioration-elon-musk-tesla-european-central-bank-ecb-lagarde-manufacturing-pmi-business-live?utm_source=chatgpt.com

Government Shutdown Takes Off-Flights Don't

Last Saturday alone, more than 2,200 flights were cancelled as the ongoing U.S. government shutdown continues to disrupt air travel nationwide. The Trump administration recently announced a 4% reduction in domestic flights at 40 major airports due to severe staffing shortages. If the shutdown continues past this Friday, that number is expected to increase to 10%

Fortunately, the disruption occurs during the year's slower travel period, but that relief will be short-lived. Thanksgiving and Christmas are right around the corner, and the strain on the airline industry will only continue to rise as the holiday season comes upon us. 

Secretary of Transportation Sean Duffy warned that commercial air travel in the United States could soon be reduced to "a trickle" as the number of air traffic controllers continues to fall. According to Airlines for America, which represents the largest U.S. airline industry, 71% of recent flight delays are due to staffing shortages among air traffic controllers. 

Despite the shutdown, air traffic controllers and airport security are expected to continue showing up to work, without pay. Many have been forced to take on a second job just to make ends meet. 

As the country navigates what has become the largest government shutdown in U.S. history, the outlook for travelers remains unknown. With the holiday season fast approaching, it's unclear how many Americans will actually make it home to spend time with their loved ones. 

42,000 Jobs added

    The ADP reported that there were 42,000 jobs added by employers in October, which was higher than Economist were expecting. The government is still in a shut down, so we are not sure if the government's job report will release on Friday. It will most likely be a delay. Although ADP shows this increase in jobs, there are other private surveys of the job market showing that there is a weakening in replacing workers who quit or retire, and some big-name firms such as IBM and Amazon have announced layoffs (Smart). Large employers (500 employees+) drove the gains in the ADP report, with 74,000 jobs added, while industry sector, trade, transportation and utilities added 47,000 jobs, and education and health care tide in added 25,000 workers. 
    
    Studies have shown that employers cut jobs in professional business services are down by 15,000, while information, and leisure and hospitality, were also cut by 17,000 and 5,000 (Smart). There was a recent survey done by Paychex's that shows that hiring among small businesses with fewer than 50 employees, which causes some caution, however, in September, there were 29,000 jobs lost, which means that we are doing a little better. 

    The article I read also talked about how there were two dissents at the Fed’s October meeting. At the meeting, one member of the central bank’s monetary policy committee wanted a bigger cut of a half point and the other preferred no cut, which means that nobody knows what they are going to do and that will depend on what incoming data, assuming the Fed has enough to make a decision (Smart). 

Smart, T. (2025). ADP: Employers Add 42,000 Jobs in October. US News & World Report; U.S. News &

    World Report. https://money.usnews.com/money/personal-finance/articles/adp-employers-add-42-000-        jobs-in-october