UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Labor pains?'
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Dec 4, 2025 The US labor market's dynamics take center stage, as low unemployment fears lead to decreased savings among consumers. This drop in savings has fueled recent price increases in the US. Important jobless claims data are under scrutiny after disappointing ADP payroll numbers. The limitations of ADP as a labor market indicator are discussed, with insights into how hidden unemployment can be masked. Meanwhile, the podcast touches on the complexities of AI hiring excuses amid policy uncertainty, and the impact of US trade decisions on China.
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Perception Drives US Consumer Spending
- Low fear of unemployment let US consumers cut savings and fund higher prices since April.
- Perceived labour market strength is key to sustaining US consumption and inflation.
Claims Vs. Reality In Labour Data
- ADP's weak payrolls reading increases market focus on initial jobless claims today.
- Claims matter for unemployment fear but can miss unemployed new entrants who lack benefits.
Reluctance To Hire Masks Unemployment
- Businesses' reluctance to hire creates unemployed entrants who may not show up in claims data.
- This hiring caution likely reflects policy uncertainty rather than widespread structural joblessness.