The Breakdown Macro Weakness Paves the Way for Another Fed Rate Cut
Nov 5, 2024
The latest discussion dives into the shockingly weak jobs report, revealing only 12,000 new payrolls, and its potential impact on Federal Reserve decisions. It highlights a private sector struggling to keep up amid economic disruptions. Additionally, the analysis of recent GDP growth shows strong consumer spending but raises concerns about government-led growth. Unusual trends in the bond market are also explored, prompting questions about the future economic landscape.
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Weak Jobs Report
- October's jobs report revealed the worst labor market since late 2020, with only 12,000 new payrolls.
- This was significantly below the 100,000 consensus estimate, impacted by hurricanes, strikes, and downward revisions.
Declining Employment Trends
- Temporary worker numbers declined, reflecting labor market contraction since March 2022.
- The household survey showed fewer jobs, a shrinking labor force, and declining full-time and part-time employment.
Government vs. Private Sector Growth
- Government job growth is outpacing private sector growth, raising concerns about the public sector crowding out private enterprise.
- This, combined with high fiscal deficits and debt-to-GDP ratio, raises questions about long-term economic stability.