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

Race to the Top: AI Spending

Consumer spending and hiring may be in a slow period in the broad economy, but the big US tech companies are going the opposite way, due to their large investment spending in artificial intelligence. In the latest earnings reports from large tech companies, namely Microsoft, Amazon, Alphabet, and Meta all showed massive increases in capital expenditures mostly toward AI spending. Most of this AI spending is aimed at new data centers, advanced chips and cloud capacity for larger models. Microsoft spent almost $35 billion last quarter, more than 70% from a year ago, while Amazon spent almost $34 billion. Alphabet clocks its full year spending in at roughly $90 billion, and Meta enlarged its spending over $70 billion, showing no sign in this AI spending race. 

Even with good revenue and solid earnings growth, investors aren't jumping for joy quite yet. Shares of Meta and Microsoft dropped after their reports came out due to worrying that the AI investment would squeeze the profit margins for these companies. Even though these companies are ensuring these investors that this spending is necessary to meet the large demand for AI development to secure the top spot in the race, the investors still aren't fully convinced if, or when the investment will start to pay off. 

The difference between investor skepticism and corporate optimism is shared in its likeness in Silicon Valley. Where executives of tech companies are rather optimistic about the surge of Ai and all of the demand that comes with it. They believe in the transformation that AI will bring upon the economy. Markets however do not reflect that; they are more so reflecting the billions in spending on infrastructure and massive energy costs that may not pay near term. As of now it is just a game of risk, although the future seems to be in AI the question seems to be how soon that future will be.

How much Google, Meta, Amazon and Microsoft are spending on AI

Mortgage rates jump 20 basis points following Fed cut

This week the Fed cut the interest rate which caused mortgage rates to go up. The 30 year mortgage rate jumped 20 points to 6.3% after Jerome Powell spoke. The bond market had already expected the rate to cut, but didn’t like Powell’s comments, which caused rates to rise. The same thing happened after the last cut in September when mortgage rates also jumped.

Experts say the market was too confident that the Fed would make more rate cuts in 2025 and Powell’s comments made investors less sure. Even though lower rates had led to a surge in refinance applications, they haven’t encouraged more people to buy homes. The housing market is still slow as high prices and borrowing costs make it difficult for home buyers.

https://www.cnbc.com/2025/10/30/mortgage-rates-fed-cut.html 

Is Gen Z Screwed?

 A recent article by Futurism discusses a Goldman Sachs report warning that Generation Z could face a future shaped by automation and artificial intelligence. The report suggests that while AI will likely boost productivity and economic growth, it may also replace many entry-level jobs, the very positions younger workers depend on to start their careers.

This creates a major challenge for both workers and policymakers. If the economy grows because of AI but doesn’t create enough jobs, we could experience what economists call “jobless growth.” In theory, output rises, but employment stagnates. That disconnect has serious implications for income distribution, consumer demand, and long-term stability.

From a macroeconomic perspective, this situation highlights the tension between technological progress and labor market adjustment. Innovation boosts efficiency, but it can also make certain skills or roles obsolete faster than new ones appear. It also connects to structural change, where economies shift toward sectors that rely more on capital and technology than on human labor.

For students and young professionals, this raises real questions about how to prepare for a future shaped by automation. Should we focus on developing technical skills to work with AI, or on creative and interpersonal skills that machines can’t replace? And for policymakers, how do you support growth while also protecting opportunities for new workers?

https://futurism.com/artificial-intelligence/goldman-sachs-genz-automation

The Long-Term Sustainability of AI Investment

    The ongoing debate over artificial intelligence (AI) investment focuses on whether current spending represents a lasting technological shift or an unsustainable bubble. Major tech firms such as Microsoft, Amazon, Alphabet, and Meta Platforms are leading the charge, supported by strong, profitable businesses outside of AI. Their established revenue streams make their AI investments more secure and less speculative than past technology booms that were fueled by hype rather than real economic strength.

    At the center of this surge is Nvidia, whose graphics processing units (GPUs) power the vast majority of AI systems. The company projects that global spending on AI data centers will reach $600 billion this year and could climb to as much as $4 trillion by 2030. While some view these numbers as overly ambitious, Nvidia’s insight into future demand is unmatched. Because AI hyperscalers plan their hardware purchases years in advance, Nvidia has a clearer understanding of where the market is heading, suggesting that AI expansion may have far more room to grow than many investors assume.

    Concerns about an AI bubble largely stem from the financing structure surrounding OpenAI, the creator of ChatGPT. Some analysts warn that companies may be funding each other’s purchases in a way reminiscent of the dot-com bubble. However, unlike that era, the current leaders in AI, such as Meta, Alphabet, Microsoft, and Amazon, generate substantial cash flow from other successful ventures, reducing the risk of circular financing. The key indicator to watch will be whether these firms begin scaling back their AI investments. For now, all four are planning record capital expenditures through at least 2026, signaling that AI growth remains strong and likely sustainable in the years ahead. 

https://finance.yahoo.com/news/ai-rally-sustainable-just-another-103000211.html

Too much money in the bank could cost you big — here’s how to tell

Too much money in the bank could cost you big — here’s how to tell

 You might think having a lot of cash in your bank account is the safest thing you can do. After all, cash is secure, easy to access, and gives you peace of mind. But right now, with inflation running and bank account interest rates tiny, keeping too much money in your checking or savings account could quietly drain your wealth.

Here’s what we’re seeing: According to a recent report, the average American family holds around $62,410 in their checking account. That sounds solid, but consider this, as of September 2025, checking accounts are paying about 0.08% interest, while inflation is around 2.9%. That means your money is growing slower than prices are rising, so its purchasing power is shrinking. Over time, that means less value in your money than you expect.

From an economist's perspective, this is the classic "opportunity cost" problem. Money that sits idle is money not working for you-money which could have been invested to earn more money, help you keep up with inflation, or grow your future income. Accordingly, holding a large cash balance under these conditions is considered by economists to be a potential drag on the accumulation of wealth.

Of course, this doesn’t mean you should put all your cash into risky assets. You do need liquidity, money you can access when you need it, for emergencies, unexpected costs, or just peace of mind. But the key is balance, enough cash for safety, not so much that it becomes a drag on your long-term financial goals.

For your macroeconomics framework, this situation relates to a number of different themes. One is inflation versus savings, for your real return on savings to beat inflation, you must earn enough from your savings to preserve value. Another is investment, if people hold excess cash instead of investing, then aggregate investment can be lower, and that can slow economic growth. And finally, there's resource allocation: even though cash is safe, it's not the most efficient use of your financial resources in this environment.

In plain terms, if your bank account is filled with money that isn't serving a clear purpose-an emergency fund plus maybe a cushion for the short term-then you're probably losing out on potential growth. On the other hand, over-investing or having no cash buffer is not good either. The best action is one which provides security and at the same time lets your money work. Having cash in the bank is safe, but in today's economic climate, this could silently cost you money. Think about how much one really needs for near-term security; then consider moving the rest into options that may offer higher returns and better keep pace with inflation. That will keep you away from the hidden cost of doing "nothing" with your money.

Read more at:
https://economictimes.indiatimes.com/news/international/us/best-way-to-grow-your-money-in-2025-too-much-money-in-the-bank-could-cost-you-big-heres-how-to-tell/articleshow/124969548.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst