Latest / Markets with Megan: A Quick Financial Markets Update / Are Jobless Claims About to Spark a Market Shift? | S2 E065 | 08-07-25

Transcript

Are Jobless Claims About to Spark a Market Shift? | S2 E065 | 08-07-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: The cracks continue in the labor market.
• 0:02
  Megan Horneman: It is Thursday, August 7th, and this is Markets with Megan.
• 0:05
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• 0:07
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• 0:08
  Megan Horneman: Also, share it with friends, family, colleague members.
• 0:11
  Megan Horneman: But what we want to discuss here today is what we've seen from the labor market, and the labor market is going to take a lot more importance between now and the next Fed meeting, which is in the middle of September.
• 0:21
  Megan Horneman: So every week we get the jobless claims and typically this isn't market moving, but it is something that the Fed's paying attention to and investors should be cognizant of as well.
• 0:32
  Megan Horneman: What we're seeing is that initial jobless claims for the week ending August 2nd, they rose to 226,000 versus 219,000.
• 0:41
  Megan Horneman: That still is relatively low in the historical context and would suggest that the labor market's continuing at a slower000,.
• 0:45
  Megan Horneman: That still is relatively low in a historical context and would suggest that the labor market's continuing at a slower pace, but still continuing.
• 0:50
  Megan Horneman: But where these cracks are emerging is also in this continuing claims data.
• 0:55
  Megan Horneman: So these are the people that continue to file unemployment claims for being unemployed, and what you're seeing is that this now has risen to 1.97 million people that are filing for continuing claims, and this is the highest level we've seen since the end of 2021.
• 1:16
  Megan Horneman: So we are getting concerned here from the labor market perspective.
• 1:19
  Megan Horneman: It's nothing new from what we've outlined in these podcasts, but when you look at the labor market data we received last week for the employment report, these cracks are starting to emerge.
• 1:31
  Megan Horneman: Where the Fed should be able to at some point cut interest rates in the second half of this year whether it's September or December is still up in the air.
• 1:39
  Megan Horneman: We still lean in the camp that they're probably only going to be able to cut once.
• 1:43
  Megan Horneman: We're still in the camp that it'll probably be closer to December, and that's because the inflation data is still a problem.
• 1:51
  Megan Horneman: If you look at the ISM services report that we got earlier this week, it's showing you that prices paid on the service side jumped again.
• 1:59
  Megan Horneman: So inflation is still there, specifically in that sticky part of the market that the Fed's paying attention to.
• 2:06
  Megan Horneman: So, while the labor market is weakening and we're seeing cracks emerging, this is going to be difficult for the Fed to decide which one they want to look at closer, whether it's the labor market or inflation.
• 2:16
  Megan Horneman: We think at the end of the day, it's going to be inflation and it's going to keep them in a very difficult situation in the second half of this year.
• 2:23
  Megan Horneman: That's all we have.
• 2:24
  Megan Horneman: If you'd like a history of the podcast, you can go to marketswithmegan.
• 2:27
  Megan Horneman: fm.
• 2:27
  Megan Horneman: Thank you.