Welcome back to The Breakdown with me, NLW.

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What's going on, guys? It is Tuesday, September 9th, and today we are talking soft job numbers and the implications for rate cuts. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod.

Well, friends, right now, everyone has their attention firmly turned towards the Fed in September.

And frankly, last Friday's job numbers absolutely helped clear the way for Fed cuts next week.

The jobs numbers came in extremely soft. Just 22,000 non-farm payrolls were added in August,

and the unemployment rate ticked up again to 4.3%. Youth unemployment, meanwhile, rose to 10.5%, meaning this is the worst

job market for college grads and school leavers since 2016. The healthcare sector was one of the few

industries to add jobs, while information, financial services, federal government, and business services

are all an outright contraction. The politically sensitive manufacturing sector posted another month of job

losses, with 12,000 positions lost to bring total losses for the year to 78,000. The jobs report

sent a clear message that the labor market is falling apart. Morgan Stanley analysts called it a,

quote, no higher labor market.

Further revisions were made to the jobs numbers for June and July, with 6,000 jobs added to the

July numbers and June revised down to show a net loss of 13,000 jobs. To give a sense of scope,

over the past year or two, 300,000 jobs added has been at the high end of the range,

while 43,000 jobs added in October of 2024 was

the worst month over the past three years. Three of the past four months are worse than that

October, and we now have the first outright negative months since 2020. Daniel Zhao, chief

economist at Job Site Glassdoor, said, the job market is stalling short of the runway,

the labor market is losing lift, and August's

report, along with downward revisions, suggest we're heading into turbulence without the soft

...