Bloomberg Surveillance Bloomberg Surveillance TV: December 9, 2024
Dec 9, 2024
Nela Richardson, ADP's Chief Economist and ESG Officer, shares valuable insights on the Fed's interest rate decision, emphasizing their wait for upcoming CPI data. She discusses the contrasting signals in the labor market and the high stakes of job loss in today's economy. Tim Adams suggests a more cautious fiscal approach, while Andrew Hollenhorst warns about job prospects. The conversation navigates through economic optimism amidst inflation concerns, reflecting on how policies and market dynamics will shape the future.
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Conflicting Labor Market Signals
- The labor market exhibits conflicting signals, with payroll surveys suggesting job growth while household surveys indicate job losses.
- The household survey may be a more reliable indicator, suggesting a potential recessionary trend.
Labor Hoarding and its Implications
- Businesses are currently hoarding labor, resulting in low hiring rates but stable layoff rates.
- Job loss probability is not higher, but the probability of finding a new job after losing one has decreased.
Fed's Likely Response to CPI Data
- The Fed is likely to cut rates in December even with strong CPI numbers.
- Future rate cuts depend on inflation and labor market signals, with a potential slowdown in cuts if inflation remains high.