It's Thursday ¯\_(ツ)_/¯ (on Friday)

The lede today is not the unemployment numbers, it's the Federal Reserve cut its benchmark rates by 250 basis points (¼%).

The cut was never in doubt, it was only the number:

The Federal Reserve lowered interest rates Thursday by a quarter of a percentage point as inflation continues to cool, but a cloudy economic outlook after Donald Trump was elected again could make the pace of future cuts uncertain.

The unanimous decision to cut rates for the second consecutive Fed meeting signals that officials are paying more attention to warnings of a softening job market. In September, the Fed reduced its benchmark interest rate for the first time in more than four years by a larger-than-usual half-percentage point.

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The Fed’s benchmark rate now sits between 4.50 and 4.75 percent. Interest rate cuts trickle through the financial sector to make an array of consumer and business loans cheaper.

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Analysts and investors in the futures market believe that yet another quarter-percentage-point cut is likely at the Fed’s final 2024 meeting in December, although the pace of additional cuts next year is uncertain.

Also in this story was a bit of palace intrigue:

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Powell on Thursday also shut down questions about whether he would prematurely end his term running the central bank. He said that any attempted firing or demotion by the president — of himself or other Fed officials — was “not permitted under the law” and that he would not leave before the end of his term in May 2026 if Trump asked him to.

The issue has been front and center among Fed watchers because Trump repeatedly lashed out at Powell during his first term for not doing enough to stimulate the economy — and even asked his own advisers if he could fire his own Fed chief. Now, with Trump headed to another four years in the White House, some of his advisers have suggested that Powell should resign.

I don't know how any such conflict would pan out, but I'd like to see them both lose.

Unemployment claims


Labor Costs & Productivity Meanwhile, on to the unemployment numbers, where initial and continuing claims both rose by a bit over 1%, and the sado-monetarists are worrying about continuing evidence of pay increases for workers.

Never mind that productivity is rising faster than wages, which means that the effect is disinflationary, to keep the working man in his place.

The number of Americans filing new applications for unemployment benefits rose slightly last week, suggesting no material change in the labor market and reinforcing views that hurricanes and strikes had resulted in job growth almost stalling in October.

Though the labor market is easing, wage pressures are not showing a significant cooling, casting a shadow over the inflation and interest rate outlook. Unit labor costs increased at a solid clip in the third quarter, other data from the Labor Department showed on Thursday.

Economists said the strong rise in labor costs, which was accompanied by a sharp upward revision to the second-quarter data, was not compatible with inflation returning and staying at the Federal Reserve's 2% target. The U.S. central bank on Thursday cut interest rates by 25 basis points as expected, lowering its policy rate to the 4.50%-4.75% range.

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Initial claims for state unemployment benefits increased 3,000 to a seasonally adjusted 221,000 for the week ended Nov. 2, the Labor Department said. Economists polled by Reuters had forecast 221,000 claims for the latest week.
Unadjusted claims rose 10,827 to 212,274 last week, boosted by a 4,278 jump in filings in California. Applications rose by 3,563 in Michigan and shot up 1,927 in Ohio, more than offsetting notable drops in Florida and Georgia.

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Concerns about inflation were amplified by a separate report from the Labor Department's Bureau of Labor Statistics showing unit labor costs - the price of labor per single unit of output - increased at a solid 1.9% annualized rate in the July-September quarter after an upwardly revised 2.4% pace of expansion in the second quarter.

From a purely economic standpoint, I have no clue as to what is going.

More generally, we are about to get f%$#ed like a drunk sorority girl.