Morning Report: More evidence the labor market is weakening

Posted on November 6, 2025 by Brent Nyitray

Vital Statistics:

Stocks are flattish this morning on no real news. Bonds and MBS are up small.

The employment market continues to weaken. Announced job cuts surged 175% on a YOY basis to 153,074. “October’s pace of job cutting was much higher than average for the month. Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes. Those laid off now are finding it harder to quickly secure new roles, which could further loosen the labor market,” said Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas.

Warehousing and Tech saw the biggest number of cuts. “This is the highest total for October in over 20 years, and the highest total for a single month in the
fourth quarter since 2008. Like in 2003, a disruptive technology is changing the landscape,” said Challenger.

Bonds got crushed yesterday after a stronger-than-expected ISM Services Report. The services economy improved in October, driven by a big jump in New Orders and Business Activity. It wasn’t all great news however, with employment staying in contraction territory and prices jumping from 69.4 to 70 which was the highest reading in 3 years.

 “October’s Services PMI® is a continuation of a downward trend of more than 10 percentage points in the 12-month average since February 2022, when it was 62.6 percent. The rebounds in both the Business Activity and New Orders indexes in October are positive signs, while the continued contraction in the Employment index shows a lack of confidence in the continued strength of the economy. The Backlog of Orders Index continued its 3½ year declining trend; even with a contracting Employment Index, companies can more than keep up with new orders to reduce backlogs. Respondents continued to mention the impact of tariffs on prices paid. There was no indication of widespread layoffs or reductions in force, but the federal government shutdown was mentioned several times as impacting business activity and generating concerns for future layoffs. In the Health Care & Social Assistance and Retail Trade industries, panelists noted seasonal strength in activity, and comments from many industries mentioned continuing demand stability.”

Homebuilders are seeing inventory build up and are offering incentives to move the merchandise. Some builders are offering mortgage rates as low as 4% and still houses are not moving. Unsold inventory is at the highest level since the summer of 2009.

D.R. Horton is offering a 3.99% mortgage, while Lennar is offering discounts of 14%. This is translating into lower margins and a slowdown in building new units. The glut of properties is most pronounced in Southern California and Washington DC.

The Supreme Court seemed skeptical that Trump’s massive use of tariffs without Congressional Approval is Constitutional. “You say tariffs are not taxes, but that’s exactly what they are,” Justice Sonia Sotomayor, one of the court’s liberal members, told Solicitor General D. John Sauer. “They’re generating money from American citizens, revenue,” Sotomayor said.

If the Supreme Court rejects the tariffs, then they would require Congressional Approval, which appears dicey since voters are generally downbeat on the economy.

Even with tariffs, inflation remains around 3%, which is above the Fed’s target but not astronomical. Shelter inflation is about to go from an inflationary pulse to a disinflationary one, and absent these tariffs, inflation might fall below the Fed’s target. If so, then the Fed needs to get to neutrality in a hurry, and might have stayed too late at the party.

Filed under: Economy |

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41 Responses

  1. jnc4p's avatar
    jnc4p, on November 6, 2025 at 11:32 am said:

    This:

    There’s a nice illustration of this in the recent Ezra Klein interview with Ta-Nehisi Coates. Klein has been beating the drums for the big tent approach. He ventures the following to Coates, in the process of trying to desperately convince him of the political necessity of Democratic big tent politics:

    [A] huge amount of the country, a majority of the country, believes things about trans people, about what policy should be toward trans people, about what language is acceptable to trans people, that we would see as fundamentally and morally wrong…what politically…should our relationship with those people be?

    Unsurprisingly, Coates doesn’t take this and the many other hints dropped by Klein about reaching those who dissent from liberal orthodoxy. As far as Coates is concerned all these people are on the other side of a line that must be drawn between those with the correct views and those who lack them: “If you think it is OK to dehumanize people, then conversation between you and me is probably not possible,” he remarks.

    But even more interesting is how Klein frames the question: those who don’t share his (and Coates’ and the general Democratic) view on trans issues are “fundamentally and morally wrong”. This language by Klein makes it clear that his idea of the big tent is that some Democrats, especially candidates running in more conservative areas, should be permitted to have wrong, immoral positions on various issues so as to entice the benighted voters in those areas to vote for Democrats—or, as Matt Yglesias has put it, to allow “bigots in the tent.” But the positions of the party on those issues will and should remain the same. You can come into the tent but the left will still be running the show.

    This won’t work and, no, talking about the affordability crisis and the cost-of-living will not induce these voters to forget what the party actually stands for.

    https://www.liberalpatriot.com/p/the-big-tent-is-overrated

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  2. jnc4p's avatar
    jnc4p, on November 6, 2025 at 1:23 pm said:

    Interesting read:

    “‘There Should Be Flashing Red Lights’: Steve Bannon on Mamdani’s Win

    Trump’s former White House strategist has a warning for Republicans gloating about Zohran Mamdani’s election.

    By Megan Messerly

    11/05/2025 10:00 AM EST”

    https://www.politico.com/news/magazine/2025/11/05/steve-bannon-zohran-mamdani-warning-interview-00637071

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  3. jnc4p's avatar
    jnc4p, on November 7, 2025 at 6:50 pm said:

    Good read:

    Sausage Factory Offers Accidental Tour

    sausage consumers permanently reject sausage

    Chris Bray

    Nov 07, 2025

    https://chrisbray.substack.com/p/sausage-factory-offers-accidental

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  5. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on November 9, 2025 at 9:02 pm said:

    KosKidz, fighting the real enemy.

    democratos

    sidnora

    Nov 09, 2025 at 08:36:23 PM

    Using ‘kabuki’ as a pejorative demeans a worldwide treasure 

    kabuki (kæˈbuːkɪ) n

    (Theatre) a form of Japanese drama based on popular legends and characterized by elaborate costumes, stylized acting, and the use of male actors for all roles. See also Nō.

    IMG_2554.jpeg

    [Japanese, from ka singing + bu dancing + ki art]

    — Collins English Dictionary – Unabridged, 12th Edition 2014.

    A demeaning characterization (not definition) of ‘kabuki’ from urban dictionary site:

    Showy posturing performed as an act of theater. Typically used by pundits to describe an empty political performance which serves to satisfy or distract an audience.

    Never change!

    https://www.dailykos.com/story/2025/11/9/2352979/-Here-s-Some-Of-The-Centrists-Who-Are-Helping-Senate-Republicans-End-The-Government-Shutdown#comment_92228482

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    • Brent Nyitray's avatar
      Brent Nyitray, on November 12, 2025 at 6:36 pm said:

      I am skeptical. Too good to be true.

      Feels extremely astroturfed

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      • jnc4p's avatar
        jnc4p, on November 13, 2025 at 10:11 am said:

        I do think there is a growing general antisemitism on both right and left when it comes to the young people who are politically active online.

        All things considered, I wish that Charlie Kirk was still around and Nick Fuentes was gone.

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  10. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on November 14, 2025 at 11:17 am said:

    Man, the hard left is all in on the Epstein stuff.

    https://www.dailykos.com/search?text=jeffrey+epstein&time_begin=11%2F07%2F2025&time_end=now&text_type=any&text_expand=contains&search_type=search_stories&time_type=time_published&submit=search

    I know the right really exploited the living shit out of Epstein and have not handled it particularly well since taking office but I’m not sure it’s really resonating outside of progressives and some fringe right. I’m will to accept that I could be in my bubble. That said, I think most on the right realize that if there were any really damning stuff against Trump, Biden would have used it. As far as what the Dems dumped the other day, I think it’s backfiring on them or having very little impact, especially considering that the Republican controlled committee promptly released 22,000 pages with all sorts of big Democrat names attached.

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  11. jnc4p's avatar
    jnc4p, on November 14, 2025 at 12:21 pm said:

    Nice explanation of the difference between American “woke” Marxism and classical Marxism.

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  17. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on November 19, 2025 at 8:23 pm said:

    And here’s the nut,

    ”In this context, many public commentators arguethese men are just rebranding themselves as self-aware, feminist-adjacent and “not like other guys” to seek better dating opportunities”

    All male actions have to be looked at through the lens of trying to get laid.

    https://theconversation.com/the-rise-of-the-performative-male-how-young-men-are-experimenting-with-masculinity-online-268742

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  18. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on November 21, 2025 at 4:59 pm said:

    This paragraph is a thing of beauty!

    ”One Epstein victim said recently that about 1,000 women had survived his abuse. As for Trump, his pro-fossil-fuel policies will lead to up to 1.3 million additional temperature-related deaths around the world in the coming decades, according to a new analysisby ProPublica and the Guardian.”

    They’ve got him on the run now!

    https://redstate.com/bradslager/2025/11/21/new-evidence-shows-jeffrey-epstein-was-a-horrible-person-he-dared-to-doubt-climate-change-n2196440

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    • jnc4p's avatar
      jnc4p, on November 25, 2025 at 10:27 am said:

      They were trying to troll Trump and they succeeded.

      A better reaction from Trump would have been to challenge them on whether Obama’s drone strikes on American citizens were an example of an illegal order.

      This was a good piece about the trolling:

      This maneuver, 1.) hit opponent 2.) look at opponent’s subsequent clenched fist, 3.) cry out in terror, shaking and sobbing, OH GOD WHY ARE YOU THREATENING ME, is Cluster B 101, the instinctual DARVO tactic that animates leftist politics. Leftist politics is always this, all day and forever

      https://chrisbray.substack.com/p/its-darvo-week-in-the-news

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      • Let the mutherfuker burn!'s avatar
        Let the mutherfuker burn!, on November 25, 2025 at 11:29 am said:

        Interesting piece. I agree that is the tactic but disagree that it does a disservice to Trump overall. As John Barth once wrote, sometimes you have to stone a martyr. In the end, everybody gets what they want insofar as Trump gets to service his base with literal and metaphorical headbusting and the left gets their clips and soundbites for their own media and base. Regarding the broader electorate, almost none of them below age 65 are watching, listening or reading anything at all that would include coverage of these events, from either side. Most people, when they do see violence against the State tend to blame those engaged in violence. We overestimate the impact that news has on the broader electorate, Trump’s three elections prove that, hell, Republicans winning anywhere gives lie to the media’s influence. You and I can’t quit it, interest in politics is in our blood, but we are less that 10% of the electorate, I suspect.

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  20. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on November 25, 2025 at 6:57 pm said:

    Ace reviewed Nuzzi’s book and this paragraph really jumped out at me,

    But it sounds so mundane when you say it that way. So instead we get a lot Jazz Odyssey riffing about hands going up skirts and flesh being torn by steel traps.

    It’s a good read.

    https://acecomments.mu.nu/?post=417457

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  21. jnc4p's avatar
    jnc4p, on November 30, 2025 at 2:47 pm said:

    Happy Thanksgiving everyone.

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  22. jnc4p's avatar
    jnc4p, on November 30, 2025 at 2:51 pm said:

    This provides more context to the Congressional Democrats video about the military and illegal orders.

    A Dishonorable Strike

    Indulging all assumptions in favor of the administration’s boat strikes, killing helpless men is murder

    Jack Goldsmith

    Nov 28, 2025

    https://www.execfunctions.org/p/a-dishonorable-strike

    Hegseth order on first Caribbean boat strike, officials say: Kill them all

    As two men clung to a stricken, burning ship targeted by SEAL Team 6, the Joint Special Operations commander followed the defense secretary’s order to leave no survivors.

    Updated November 28, 2025

    By Alex Horton and Ellen Nakashima

    https://www.washingtonpost.com/national-security/2025/11/28/hegseth-kill-them-all-survivors-boat-strike/

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