Are interest rates finally taking their bite out of the economy? Friday’s news that hiring had slowed certainly adds to the case. Markets have anticipated a slowdown and the impact of rate hikes for months now. While several economic factors have been positive, hiring stands out as one of the more significant indicators to consider. Should the economy finally be turning, embracing active investing could be one way to adapt.
U.S. employers only added 150,000 jobs in October, a drop from September’s revised 297,000. That not only counts up to half of September’s total but was the smallest gain since June. While that slowdown inherently represents bad news, which could boost the case for a recession, the hiring slowdown also boosted stock futures.
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That response marks the stock market’s belief in a possible rate cut down the line. That would provide a notable boost to the economy overall, of course. However, that outcome remains somehow unlikely with the implied probability of still having the Fed Funds rate above 4.5% even by 2025.