First Friday: The Dollar Is Weak, Bonds Are Expensive, and We Owe WWII-Level Debt

Afford Anything

Paula Pant | Cumulus Podcast Network

Entrepreneurship, Business, Investing

4.6 • 3.4K Ratings

🗓️ 6 June 2025

⏱️ 59 minutes

🔗️ Recording | iTunes | RSS

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Summary

#614: The US just added 139,000 new jobs in May. That beat expectations. But the real story isn't in the job numbers — it’s in the bond market. Something unusual is happening in bonds. Treasury yields are spiking. The dollar is weakening. That combination almost never happens together. And it's signaling concerns about future inflation. Trade wars continue on. A federal court just struck down some tariffs. The administration will appeal. Meanwhile, the EU has until July 9 to cut a deal. If they don't, 50 percent tariffs kick in. As a result, many companies are playing defense instead of growing. The debt situation keeps getting worse. We owe $36.2 trillion. That's more than we owed at the end of World War II as a percentage of our economy. Moody's just downgraded our credit rating. We're not alone — Britain's bonds just hit their highest levels since 1998. The accredited investor rules could finally change. Right now you need an income of $200,000 ($300,000 as a couple) or $1 million in net worth to access private markets. Those numbers haven't changed since they were written in 1982, even though adjusted for inflation, that $200,000 would be $662,000 today. The SEC might start loosening enforcement of the accredited investor rules. That could open up more investments to people who've been locked out for decades. Crypto is finding its footing. The SEC dropped cases against Coinbase. They're backing away from treating most crypto like securities. Bitcoin sits near all-time highs. The US keeps building its strategic Bitcoin reserve. The House just passed what's being called the "One Big Beautiful Bill." It extends 2017 tax cuts. Eliminates taxes on tips and overtime. The Congressional Budget Office says it'll add $2.4 trillion to the deficit over 10 years. That's sparked debate between deficit hawks and growth advocates — including one particularly high-profile debate that has been plastered across the headlines. Consumer sentiment stays stuck at 2022 lows. People expect 6.6 percent inflation. The actual rate is 2.3 percent. That gap between what the data says and what people feel shows up everywhere. We cover all of this in today’s First Friday economic update. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	We created more jobs than expected. The U.S. added 139,000 new jobs in May, slightly exceeding expectations.
0:07.8	The mood had been sour because this private payroll company, ADP, came out with a report two days prior on Wednesday, showing that job growth in the private sector had slowed a bit.
0:18.7	But this morning, the BLS, the Bureau of Labor Statistics,
0:21.6	published their monthly first Friday of the month jobs report, which exceeded expectations,
0:27.1	although it also, similar to ADP's report, pointed to fewer jobs being created in May as compared
0:34.4	to April. So in April, we created 147,000 new jobs. In May, we were expecting
0:41.5	that we'd only create 130,000. We actually beat that and we created 139,000. What does that mean?
0:47.9	Big picture. It means we're adding more jobs, but we're slowing down the rate at which we do
0:53.2	so. It also means that we
0:55.5	expected the slowdown to be worse, so it's still a slowdown. It's just not as bad of one as we
1:01.3	thought. Meanwhile, the unemployment rate held steady at 4.2%. But nobody's talking about the jobs
1:08.2	report this morning. People are talking about a big fight
1:12.0	that has dominated headlines without naming names. We're going to address that at the end of
1:18.8	today's episode. Welcome to the Afford Anything podcast, the show that knows you can afford
1:23.1	anything, not everything. Every choice has a trade-off. This show covers five pillars, financial
1:28.9	psychology, increasing your income, investing, real estate and entrepreneurship. It's double-eye
1:32.8	fire. I'm your host, Paula Pant. I hold a master's in economic journalism from Columbia.
1:38.2	And once a month, on the first Friday of the month, I produce a macroeconomic update, a look at the economic news of the last month.
1:46.9	So welcome to the June 2025, First Friday, Economic Update.
1:54.1	If you're looking for a job, health care is the big winner.
1:57.1	Over the last 12 months, it has posted an average monthly gain of 44,000 new jobs, but in May,
2:03.7	it did very well. It created 62,000 new jobs. Similarly, the leisure and hospitality sector
	...

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