As the federal government continues in shutdown mode, there continues to be a dearth of official economic statistics, including the all-important monthly extraordinary payrolls report, which plays a major role in informing the Federal Reserve’s monetary policy.
It thus elevated the status of several less followed reports and at least one flashed a major red signal for the labor market.
That will be it Monthly Job Cut Report From the outplacement firm Mapanghamon, Gray and Pasko. October data released Thursday morning showed 153,074 disappearances last month — that’s nearly triple the amount seen in October of 2024 and the highest print for any October going back to 2003.
“This will come as AI adoption, softening consumer and corporate spending, and increased costs drive belt-tightening and hiring freezes,” Challenger said. “Today’s layoffs make it difficult to quickly secure new roles, which could further loosen the labor market.”
Zooming out paints like a picture of a picture, with year-to-date job cuts now topping 1 million, up 65% from last year’s level and the highest amount since the covid panic of 2020.
October’s print for rentals was similarly weak, with 372,520 rental plans for the month, the smallest number since Challenger began tracking that data in 2012.
Ball in the Fed court
Crypto markets continue to rebound from last week’s Hawkish surprise from the Fed, where the central bank trimmed its policy rate (as expected), but Chairman Jerome Powell used his press conference to suggest market participants were completely mistaken in assuming another rate cut in December.
Because, a number of Fed spokesmen followed suit, with at least two saying that up to them, they wouldn’t have cut rates last week.
The news was certainly among the factors that sent crypto tumbling over the past eight days, along with Bitcoin It fell below $100,000 before its small bounce this morning back to $103,000.
Yes, inflation is among the Fed’s concerns, but the resurgent hawks also suggest that the job market is in solid shape and thus no longer in need of stimulus. Powell also points out the government shutdown and lack of official statistics mean the central bank is often flying blind as it tries to gauge the economy.
The Fed’s reaction to today’s shockingly challenging data will be interesting to note. For now., Traditional markets are not waiting. The 10-year Treasury yield fell six basis points to 4.10% and market-based odds of a December Fed cut rose to 69% from 60% earlier in the week.
