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

Russia tries to re-stake its claim to China after Trump’s meeting with Xi

Russia is moving to reaffirm its strategic relationship with China following Donald Trump’s meeting with Xi Jinping. Moscow has described Mikhail Mishustin’s visit to China as “very important,” and aims to deepen cooperation in trade, technology, energy and agriculture. Despite China-Russia ties strengthening since 2022, recent data show Chinese exports to Russia are down, while Russian exports to China are rising modestly, underscoring Moscow’s desire to stabilize the partnership amid wider geopolitical shifts.

Russia tries to re-stake its claim to China after Trump’s meeting with Xi

Open AIs Big Stock Market Debut soon

OpenAI is preparing to go public, with plans for an IPO that could value the company at up to $ 1 trillion. The firm may launch the IPO as early as the second half of 2026, though the timing could shift depending on market conditions. The move from private to public has significant implications for the markets. It could unlock a new pathway for raising capital, bringing in billions of dollars to fund acquisitions, hire thousands of new employees, and expand AI infrastructure. The IPO signals strong investor confidence in artificial intelligence as a significant growth sector, with global spending on AI projected to reach over $ 500 billion by 2030. At the same time, it will put pressure on OpenAI to demonstrate consistent revenue growth and profitability once it is accountable to public shareholders. The listing may also create ripple effects across the tech industry, boosting investor interest in hundreds of AI startups, chip makers, and cloud infrastructure companies.

https://www.reuters.com/business/openai-lays-groundwork-juggernaut-ipo-up-1-trillion-valuation-2025-10-29/ 

Here’s where the economy is starting to show ‘K-shaped’ bifurcation

 Americans are splitting into two groups when it comes to spending. Higher-income shoppers are still buying, while many lower-income families are cutting back. You can see it in food and drink, cars, and even airline seats. Coke says premium items like Topo Chico and Fairlife are selling well, and McDonald’s is pushing value menus because traffic from lower-income diners is down. Chipotle says some customers feel squeezed, and Procter & Gamble sees wealthier shoppers buying big packs while others stretch what they have at home. The same split shows up in big purchases. The average new car now costs over $50,000, defaults are rising for buyers with weaker credit, and airlines say premium seats are outpacing coach. A cooler inflation report came out after a shutdown delay, showing prices up 0.3% on the month and 3% over the year, and Social Security’s cost-of-living adjustment for 2026 will be 2.8%.

Hotels also show a mixed picture. Hilton’s budget brands saw softer revenue, but luxury did great. Their CEO thinks the gap may narrow if inflation and rates ease, with the middle and low end improving rather than the high end falling. To me, this “K-shaped” economy is simple to read on the ground. Households paying more for groceries and gas are trimming meals out and skipping upgrades, while wealthier households keep spending on premium drinks, bigger cars, and roomier seats. If the Fed cuts rates next week and inflation keeps cooling, we will see whether that helps the lower and middle tiers catch up.

source : https://www.cnbc.com/2025/10/23/k-shaped-spending-sectors-showing-bifurcation.html

Politics Trump administration must pay SNAP benefits despite government shutdown, judge rules

 During the ongoing U.S. government shutdown, a federal judge in Rhode Island temporarily blocked the Trump administration from halting Supplemental Nutrition Assistance Program (SNAP) benefits that feed 42 million Americans. Judge Jack McConnell ruled that the administration must use emergency contingency funds to continue providing food aid, calling the potential harm to families “irreparable.” The decision followed a similar ruling by Judge Indira Talwani in Boston, who said the suspension of SNAP was likely unlawful. In response, former President Trump said his administration was seeking legal clarification on how to fund the program. Senate Minority Leader Chuck Schumer accused him of using hunger as political leverage. The ruling argued that no administration should use food access as a bargaining chip during political disputes.

Trump admin must pay SNAP benefits despite shutdown: judge