The Jobs Report Shows a Labor Market in Big Trouble

The jobs report was just released and it shows that the U.S. labor market continues to weaken. They released the data for October and November at the same time and the U.S. labor market lost 105,000 jobs in October and gained 64,000 jobs in November. Now I want you to take a look for yourself and you could be the judge and determine how good or how bad the labor market's been trending. So here are the jobs added on a monthly basis for the past four years. And look at the trend. Everybody knows that the labor market has been worsening over the past few years. But it's the past six months where things have really been taking a turn for the worse. As you can see, there's been job losses in the past three of the latest six months and October was a brutally bad month with over 100,000 jobs lost. And another thing that I want you to keep in mind is that these numbers for October and for November, I mean they're not accurate. I don't think that's a surprise for most people. Most likely they're going to be revised downward and most likely heavily. As a matter of fact, even Jerome Powell, who's the chair of the Federal Reserve, recently said that most likely these job figures are being drastically overstated. Powell said that he suspects that the job numbers are overstated by as much as 60,000 jobs per month. Anyways, everybody knows that the labor market is weaker than the government is reporting, which is why the Federal Reserve has been cutting interest rates in order to help the economy and to help the labor markets. And we're going to take a look at how today's report, today's jobs report, affected the odds of an interest rate cut in January. Now turning to unemployment, the rate of unemployment has now jumped up to 4.6%. Take a look at the chart. That is not good. And I just want to point out that Jay Powell, chair of the Federal Reserve, said that when it comes to labor markets, the single most important data point is the rate of unemployment. And there you have it. I mean, look at the chart. It's looking very ugly. Now here's something that I want to show you. I want to say that's very disappointing to me. So wages are growing at a rate of 3.5% and currently the rate of inflation is around 6%. That means that wages are not keeping up with inflation. This means that most Americans continue to see pay cuts in 2025. So essentially, if you're not getting a 6% raise, then you are accepting a pay cut. So I just want you to keep this in mind because when it comes time to negotiate your compensation, anything over 6%, a 6% raise would technically be considered a true raise. And I just want to point out that that would only be true if the rate of inflation stays about the same. However, the thing is that I expect the rate of inflation to sharply accelerate in 2026. Because you have to remember that the Federal Reserve has turned the money printers back on as of last Friday. Now, some people may erroneously say, Brian, the rate of inflation is 3.0%. That's according to the government's CPI inflation reports. So if wages are growing at a rate of 3.5%, then wages are growing faster than the rate of inflation. And I just want to respond to that by saying that that is completely incorrect. What you have to understand is that the CPI inflation report does not measure the change in prices. The CPI inflation report does not measure price inflation. The CPI inflation report measures the change in the cost of living, which is a completely different thing. Here's how the money supply has been growing. This is coming straight from the Federal Reserve's and it is at an all-time record high. So I want to zoom in for you to see the past 10 years. So the money supply has been growing at an annualized rate of approximately 5% recently. But now we have a situation where the money printers are turned back on and interest rate cuts have been happening in Q4. And there's going to be more money loaned into existence. And we're going to be closer to 6% as of right now. Again, if your employer does not give you a 6% pay raise, then you are agreeing to a pay cut and a lower standard of living for you and your family. Now let's talk about the layoffs. And this is coming from the challenger reports. From January to November, job cuts are up by 54% year over year, which is stunning. From January 2025 through November of 2025, employers have announced 1,170,821 job cuts. Again, that's up by 54% compared to January through November of 2024. For the month of November, here are the top 4 reasons why companies are cutting jobs. One of them was restructuring 20,217,000 jobs lost in November due to store, unit, or department closings. Another one was artificial intelligence, so AI, which was cited for 6,280 job cuts in November. AI has been responsible for 54,694 job cuts this year in 2025. And then there's market and economic conditions cited for 15,755 job cuts in November. And then there's, of course, doge. So the downstream effect has been responsible for more job losses in November. And here are the industries that have been cutting the most jobs in November. So please take a look. Perhaps you may be, or you may know someone in one of these fields. And number seven, we have media. And number six, nonprofit organizations. And that's because nonprofits have been impacted because government funding, it's been getting cut down. And number five, retail. So this has been due to softening demands. I mean, I know that the governments, the politicians, central bankers, you know, at the Federal Reserve, they've been saying that consumers are strong and resilient. However, consumers have been slowing down. It's been impacting retail. And number four, we have the services sector. So this includes companies such as cleaning services, staffing companies, because the labor market is softening, and outsourcing firms. And number three, we have food companies. So one of the hardest hits within this industry has been food companies that handle beef products due to rising input costs. And number two, tech companies. So we're still seeing the downsizing continue after the overhiring during the pandemic. But now, of course, they're calling it rightsizing rather than downsizing. And at number one, the industry that's been hit the hardest in November has been telecommunications. So telecommunications has, I mean, it's been a really bad month for November when it comes to job cuts. So one example I want to show you is Verizon. And they've had some big job cuts in November due to restructuring in an attempt to save on costs. But I do want to tell you something. Like, I'm actually on Verizon. And let me know if you're on Verizon if you notice the same thing. But I feel like my coverage, like I swear to you, it's getting worse and worse every year. And I have low expectations, but Verizon just keeps on disappointing, I swear to you. Well, I guess Verizon is not going to offer me a sponsorship in the future. You know, oh, well, I'm just being honest. But this is from first-hand experience. Now, I want to show you how this jobs report has affected the odds of a future interest rate cut. The next Federal Reserve meeting is going to be on January 28th. And before the release of this jobs report, there was a 24.4% chance that the Federal Reserve would cut interest rates at that January meeting. Now, after the release of the jobs report, the odds did not change. They stayed exactly the same. I don't know if the market just shrugged off this report or if there's a lag with the CME FedWatch tool. So normally, there's not a lag. But I did notice that there was a lag last month in November after important data was released. But I'm going to keep you updated on the odds. But as of now, the odds still stand at a 24.4% chance of a rate cut at the January meeting. But I want you to be aware that at the last Federal Reserve meeting, they released their projections in their SCP, their Summary of Economic Projections. And they forecasted that they're only going to cut interest rates one time next year in 2026 by just 0.25%. But then again, as I mentioned in my previous video, the new Fed chair comes into power in May of 2026. And most likely, they're going to cut interest rates by more than just 0.25% for the entirety of 2026. Okay, so that's your jobs report. And we're going to look forward to the inflation reports this Thursday, just two days from now. So thank you so much. I'll keep you updated. Please subscribe. Thank you for the support. And I wish you a very nice day. Take care.