Labor Market 'Frozen But Solid,' Citi's Kate Moore Says

Watch Labor Market 'Frozen But Solid,' Citi's Kate Moore Says - Bloomberg on Dailymotion

Transcript

00:00I've been quoting a Scott Besson tweet for a couple days now where he says jobs are booming

00:04and inflation is falling, making his point that we're reaching the Trump golden age.

00:09But are jobs booming?

00:11You know, we're not seeing jobs booming.

00:13And look, I'm going to tell you, I'm going to fade a little bit the Challenger report today.

00:17And we're focused on a bunch of other data to kind of gauge the labor market at this point,

00:21including the jobless claims, which we can obviously gather at a state level.

00:25You know, anecdotes we're getting from companies, from earnings season,

00:27and then some third-party data, pardon me, and alternative data that we use.

00:32And the labor market is okay.

00:34I wouldn't classify it as booming by any stretch.

00:37But companies, I think, are being really smart.

00:39You might if you were the Treasury Secretary.

00:41You might have a different perspective.

00:43But we think the labor market is fine, but it's a little bit more frozen for the obvious reasons we've been talking about.

00:48And I think as we get more AI use cases and people understand whether or not there's efficiency

00:53and productivity gains as a result of these investments,

00:56you know, we might see a slightly different job market in 2026.

01:00I can't tell you what it is, if there's hiring in different places or if there are cuts.

01:04But I think that's a big overhang, as well as this uncertainty around tariffs, frankly,

01:08and whether or not it's going to lead to slower economic growth or perhaps a boost if there are refunds.

01:13Even if you were to classify the labor market as weak, is that a good reason for the Fed to cut rates?

01:20I mean, is that another rate cut or two or three going to spur companies to hire?

01:27I don't think so.

01:28And frankly, I share a view with some of our other economists that, you know,

01:31the inflation story is a little warmer than we would have liked at this point or with the Fed in a potentially more extended easing cycle.

01:40I think it was very fair, frankly, to say we're going to wait and see what happens before we make a decision in December.

01:45And in October, and I've joked and said this, if I was on the FOMC,

01:49I don't think it would have been a clear decision for me to cut rates given where we are in inflation.

01:53And, you know, we're seeing some percolating across goods and across services.

01:58And, you know, at this point, it looks like policy is appropriate for a labor market that's solid,

02:03maybe frozen, but solid, and inflation that's higher than it was six months ago.