What Does The Latest Jobs Report Mean For The Economy?
- Productivity surge from AI makes economy more efficient, but reduces labor demand.
- Tariffs contribute to decline in manufacturing and goods production.
- Fed unlikely to cut rates due to robust GDP and full employment, but inflation remains a concern.
What Does The Latest Jobs Report Mean For The economy?
The latest jobs report has left many wondering: what does it mean for the economy? In this episode of Tony Katz Today, Tony is joined with Dr. Matt Will, economist at the University of Indianapolis, to break down the numbers and explore the implications.
The report shows a lower-than-expected 50,000 jobs added in November, with the unemployment rate falling to 4.4%. But what’s behind these numbers? Dr. Matt Will explains that the productivity report, which showed a 4.9% increase, is a key factor. “We’re blowing it out of the water in this economy as far as productivity driven by AI,” he says. This productivity boost is a result of AI making us a more efficient economy, but it’s also reducing the need for labor.
Tony and Dr. Will discuss the potential impact of this on-the-job market, with Tony pointing out that the tariffs are a major contributor to the decline in manufacturing and goods production. “Manufacturing and goods production are down because of tariffs,” Dr. Will confirms. This is a concern, as these jobs are often held by people who vote and could be affected by the economic downturn.
The conversation also touches on the potential for the Federal Reserve to cut interest rates in response to the jobs report. Dr. Well argues that this isn’t likely, citing the robust GDP and the fact that we’re still at full employment. “There’s no reason to cut rates for employment purposes,” he says. However, he notes that inflation is still a concern, with the PMI report and CPI report showing signs of inflation.
Tony and Dr Will also delve into the recent announcement by the President to buy $200 billion in mortgage loans to help with housing. Dr. Will is skeptical, pointing out that this is the opposite of what the government should be doing. “The government should be selling all the mortgages they own, not buying them,” he says. This could lead to inflation and other economic issues.
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