The jobs challenge

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NAB Morning Call 17 min 2 speakers 8 chapters transcribed 19 days ago
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Why is the Challenger Jobs Survey considered a key source of US labor market data today?

Phil Dobbie 0:01
Well, no non-farm payrolls tonight, of course, but we have had the Challenger Job Survey, which supports the idea that there's a labor market weakness in the US with less hiring going on. It also gave us an idea of how marked those doge job cuts were. Also, Australian household spending looking strong. The RBA pointing to a more stable outlook. But NAB continues to point out inflation will be revised up and cuts won't come in a hurry. It's Friday. It's the third of October twenty twenty five. It's the morning call from Nab. Good morning. Well, no news is positive news for equity markets, it seems. So we've seen a 0.4% rise in the Nasdaq, a 1.3% rise in the DAX, and a 0.2% drop in the FTSE 100. The US dollar is up just 0.2% this morning.
Phil Dobbie 0:45
The Aussie is down a quarter percent to below sixty-six US cents now. And bond yields are down a little, just one basis point for 10-year treasuries, and bonds across much of Europe the same. Uh the outlier is the UK, where Yields are up two basis points, and oil is down again. WTI down two percent, Brent down almost as much and getting close to sixty-four US dollars a barrel. And here's Ken Compton this morning joining us from Sydney. Well, almost Sydney. Uh so uh no payrolls data today, of course, no weekly jobless claims last night. So we have to look elsewhere for numbers. We have just had the latest Challenger uh job survey that has some cut. credibility and lots of bad news. So that the planned layoffs for Q three was the highest since Q three twenty twenty, just after the pandemic.
Phil Dobbie 1:30
Hiring intentions for September, the weakest since two thousand and nine. In fact you struggled to find good news in this survey, wouldn't you?
Ken Crompton 1:37
Yeah, good morning, Phil. I mean, the Challenger Survey does tend to produce some fairly impressive year on year percentage changes, but uh but you know, but it but it is what it is. And in the and this this week in particular it's one of the better things we've got to run with. Um probably one interesting thing in there in terms of the detail was there, you know, the the government sector layoffs over the for year to date, uh nearly three hundred thousand to two hundred and ninety nine thousand seven hundred and fifty five.

What does the latest Challenger Survey reveal about hiring intentions and planned layoffs in the US?

Ken Crompton 2:00
So um so there's some sort of potential lasting impact from some of the doge related cuts back at the beginning of the year. And um obviously that's sort of even sort of particularly timely again now with sort of further ongoing threats overnight from the the US administration to turn some of these um you know sort of temporary shutdowns into into permanent layoffs at some agencies. So I think but overall though I think the the the picture there you can probably really sort of draw a line to that and say it does really reaffirm this low hiring low firing um um you know sort of um yeah my my mindset all paradigm I suppose that um that FedShare Powell has been relying on for for ex for explaining or supporting their sort of relatively um sort of modest response to slow employment growth over the course of this year.
Ken Crompton 2:44
You you do really see that in that in in in those numbers. There's not much there's not much firing going on, but there's there's certainly very weak intentions to hire. course the the risk always is um yeah, where is the tipping point where you do suddenly tip into um in into into layoffs. That's obviously what everyone's wary of.
Phil Dobbie 3:00
Yeah, well, uh uh on the Are There Gonna Be More Cuts, President Trump is meeting about now, I think, with uh Russell Vaught, who's his uh budget director, looking at how they're going to get rid of those thousands of jobs. Uh so Caroline Leavitt has said they're looking at agencies that don't align with the administration's values. Uh so but I mean you don't know whether that's gonna happen or is it all just putting pressure on the Democrats? So, you know, so if they if those jobs go, they can say it's the Democrats' vote.
Ken Crompton 3:26
Yeah, exactly. And it's it's very hard to draw a line through the po through the posturing and the reality on these things. So I guess part of the lesson from this year is that sometimes President Trump's posturing looks more real than it did in his first administration, but then sometimes you get to the taco moment a few days later anyway.

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