ADP Data (September)
The private sector lost 32,000 jobs — the biggest decline in 2.5 years.
Challenger Report Highlights
946,426 job cuts announced so far in 2025 — the highest since 2020.
That’s 55% higher than this time in 2024.
Job cuts are expected to surpass 1 million before year-end.
Historically, job cuts at this scale occur during recessions or major tech transitions (AI).
But data shows AI isn’t the main cause — yet.
Breakdown of Job Cut Reasons (2025 YTD)
Doge-related impact: 293,000 direct + 20,000 downstream.
Economic conditions, restructuring, bankruptcy, cost-cutting: ~300,000 combined.
AI: 17,375 job cuts.
Tariffs: 5,847 job cuts.
While AI isn’t driving layoffs yet, it’s rapidly automating back-office roles - We believes AI’s job disruption is understated, not overblown.
What This Means for the Fed
With the labor market weakening, the Fed is almost guaranteed to keep cutting rates.
Current Fed Funds Rate: 4.25%
Expected cut (Oct 29 meeting): Cutting 0.25% → 4.0%
Odds of rate cut (per CME FedWatch):
Oct 29: 96.2% chance
Dec 10: 86.3% chance
If both cuts occur → Rate drops to 3.75%
This signals a clear pivot toward easier monetary policy, bullish for stocks, metals, and crypto.
Looking ahead, it’s expected the Fed will continue cutting through 2026, especially as Powell’s term ends in May and Trump is likely to appoint a more dovish replacement.
Labor Market Context
Job openings (JOLTS data) are falling fast.
In 2022: 2 openings per unemployed worker → job seeker’s market.
Now: <1 opening per unemployed worker → employer’s market.
Historically,
1–1.5 = balanced market.
>1.5 = tight market.
<1 = slack / recessionary.
We’re now below 1, trending lower.
People are quitting less, staying in current roles, and seeing fewer opportunities.
