Latest / Markets with Megan: A Quick Financial Markets Update / Layoffs Rise. Rate Cut Next? | S2 E104 | 12-09-25

Transcript

Layoffs Rise. Rate Cut Next? | S2 E104 | 12-09-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: Well, the Fed's job keeps getting more and more difficult, and that's because we got some conflicting data this morning on the jobs market.
• 0:07
  Megan Horneman: It is Tuesday, December the 9th, and this is Markets with Megan.
• 0:10
  Megan Horneman: If you like this podcast, you can subscribe, hit the alarm bell, also share it with any of your friends, your family, your colleagues, anybody who's interested in what's going on from an economic data perspective and what it means for the markets.
• 0:22
  Megan Horneman: Let's break it down what we got this morning from the labor market perspective.
• 0:26
  Megan Horneman: We got some of the delayed government data.
• 0:29
  Megan Horneman: The Jolt's job openings report for both September and October was released this morning.
• 0:34
  Megan Horneman: When we focus on October's data, we saw that the job openings out there rose more than analysts had expected.
• 0:42
  Megan Horneman: With 7.7 million job postings for the month, it was the highest since January of this year.
• 0:48
  Megan Horneman: And that was after two consecutive months where we saw the number of job postings fall below the number of unemployed.
• 0:56
  Megan Horneman: Instead, in October, we got the reverse of that.
• 0:59
  Megan Horneman: We got the number of job postings exceeding those of unemployed.
• 1:03
  Megan Horneman: So that's showing a tight labor market.
• 1:05
  Megan Horneman: Again, it's one month data.
• 1:07
  Megan Horneman: We won't take that as a trend, but it is something the Fed's going to pay attention to.
• 1:12
  Megan Horneman: We also got the NFIB Small Business Optimum Survey, which when you look at the hiring plans in that survey, it showed that those small businesses expecting to increase hiring actually rose to the highest we've seen at all this year.
• 1:26
  Megan Horneman: Now, on the flip side of this, the negative side of these reports shows that the openings that were reported were concentrated in a couple sectors.
• 1:37
  Megan Horneman: It was retail and trade and then healthcare.
• 1:40
  Megan Horneman: The layoffs actually rose to 1.85 million, and that was the highest we've seen since the beginning of 2023.
• 1:48
  Megan Horneman: That was primarily led by some of those discretionary sectors, accommodation and food services.
• 1:55
  Megan Horneman: So that can show some softening in consumer demand, which ultimately can show softening in the labor market.
• 2:02
  Megan Horneman: The quits rate, which is also those people that are leaving their job voluntarily.
• 2:07
  Megan Horneman: Now, this tends to rise when the labor market's very good.
• 2:10
  Megan Horneman: People will leave their job voluntarily with the expectation they can get another job.
• 2:16
  Megan Horneman: This actually fell again this month.
• 2:18
  Megan Horneman: It's the lowest we've seen since May of 2020.
• 2:21
  Megan Horneman: So that's showing that employees are more concerned about their jobs at this point and the prospects.
• 2:27
  Megan Horneman: And that echoes some of the stuff we've seen in consumer confidence reports as well.
• 2:32
  Megan Horneman: Now, from a market perspective, the equity markets are higher on this news.
• 2:36
  Megan Horneman: And that's because we're not seeing a collapse in the labor market, but the Fed is, it's not enough to uh move the needle with what the Fed will do tomorrow when they meet to set interest rate policy.
• 2:46
  Megan Horneman: So equities are slightly higher.
• 2:48
  Megan Horneman: We're still about a percent from that all-time high, but again, trying to get to that all-time high and break through that.
• 2:55
  Megan Horneman: Um, bond meet yields are relatively unchanged on this news, and we don't think it's going to change the outcome of tomorrow's meeting.
• 3:02
  Megan Horneman: The Fed will likely come in and cut interest rates by 25 basis points as expected.
• 3:08
  Megan Horneman: That's all we have today.
• 3:09
  Megan Horneman: And as I mentioned, we'll be back tomorrow to talk about that much anticipated Fed meeting, specifically around their comments and what they see for the future path of policy.
• 3:18
  Megan Horneman: Thank you.
• 3:18
  Megan Horneman: If you want a history of our podcast, you go to Markets with Megan.fm.