Connect with us

Finance

The U.S. added 227,000 jobs in November, setting in motion potential Fed rate cuts at the end of the year

Published

on

227,000 jobs were added to the economy in November.  (iStock )

November saw a higher rise in job numbers than originally expected. Nonfarm payroll employment rose by 227,000, while the unemployment rate bumped up slightly to 4.2%, the U.S. Bureau of Labor Statistics reported. Health care, hospitality and government industries largely led the drive in job growth.

“Although payroll employment rebounded in November with a gain of 227,000 jobs, and the prior months were revised upwards by a cumulative 56,000 jobs, the report overall shows more softening in the labor market,” Mike Fratantoni, MBA senior vice president and chief economist, said in response to the latest report.

“The household survey again showed a large drop in employment, and more households reported spells of long-term unemployment,” Fratantoni said.

The job growth numbers are strong, but with unemployment changing little, many Americans are still struggling to find work. The retail industry was the one that lost the most jobs in November, losing 28,000 jobs.

Compared to last year, the jobless rate is still high at 4.2%. This time last year, the unemployment rate was 3.7%.

The health care sector had a good month in November, adding 54,000 jobs. Employment and leisure industries added a similar number of jobs last month, at 53,000. This is similar to the number of jobs the industry added in October.

Government employment also trended upward, adding 33,000 jobs in November, which is on par with the average monthly gain of 41,000 seen over the prior 12 months. Transportation and equipment manufacturing added a similar 32,000 jobs as well, largely thanks to the return of Boeing workers who were on strike in previous months.

If you are struggling with the effects of inflation, a personal loan with a low interest rate can help you pay down debt faster. Visit Credible to find your personalized interest rate without affecting your credit score.

INFLATION SEES THE LOWEST ANNUAL RISE SINCE 2021

Fed likely to announce rate cuts in December

A steady job market and a rising unemployment rate has the potential to sway any interest rate cuts set to be announced at the Federal Reserve’s December meeting.

“Fed officials have pointed to their ‘data dependence’ when it comes to decisions about future rate cuts,” Fratantonie said. “These data support a cut at the December meeting. MBA forecasts that the Fed will continue to reduce short-term rates in 2025, although they are likely to slow the pace of cuts.”

The labor market has started to stabilize, but it is still stagnant, as the unemployment rate shows. Experts suspect this will lead to rate cuts intended to help restart sectors of the economy. The results of the inflation report set to come out in the middle of December will also contribute to the final decision on the Fed’s part.

After December’s rate decision, 2025 looks murky when it comes to more interest rate cuts. Many experts expect a slow-down on rate cuts.

“The balance of risks is shifting toward less rate cuts next year,” said Oren Klachkin, Nationwide financial market economist. “They’ll be navigating a bit in the dark, so we think they’ll take it slowly.”

Using a personal loan to pay off high-interest debt may help you reduce your monthly expenses and put money back in your wallet. Credible can help you find your personalized interest rate today.

FHFA ANNOUNCES HIGHER MORTGAGE LOAN LIMITS FOR 2025

Consumer sentiment rises for the fifth month in a row

Consumer sentiment is a mixed bag, but it did improve for the fifth consecutive month, preliminary numbers for December found. Sentiment for the economy rose about 3%, the highest reading in seven months.

This month’s rise in sentiment was primarily due to the perception that buying certain durables would help buyers avoid future price increases. Due to the current economic situation, sentiment may not stay up if prices continue rising.

American’s political leanings have an effect on their economic sentiment. December’s report found that Democrats saw declining consumer sentiment while Republicans’ grew, and Independents sat somewhere in the middle.

Democrats as a whole are concerned about the potential economic impacts of future tariff hikes. Many believe an increase in tariffs will lead to a resurgence in inflation. Republicans believe the opposite and think President-elect Trump will usher in a substantial slowdown of inflation.

If you’re concerned about the state of the economy, think about paying down your high-interest debt with a personal loan at a lower interest rate. Head to Credible to speak with a personal loan expert and get a rate quote.

SENIORS TO GET MODERATE COST OF LIVING BUMP IN SOCIAL SECURITY PAYMENTS NEXT YEAR

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

Continue Reading

Finance

Tariffs may raise much less than White House projects, economists say

Published

on

President Donald Trump speaks before signing executive orders in the Oval Office on March 6, 2025.

Alex Wong | Getty Images

President Donald Trump says that tariffs will make the U.S. “rich.” But those riches will likely be far less than the White House expects, economists said.

The ultimate sum could have big ramifications for the U.S. economy, the nation’s debt and legislative negotiations over a tax-cut package, economists said.

White House trade adviser Peter Navarro on Sunday estimated tariffs would raise about $600 billion a year and $6 trillion over a decade. Auto tariffs would add another $100 billion a year, he said on “Fox News Sunday.”

Navarro made the projection as the U.S. plans to announce more tariffs against U.S. trading partners on Wednesday.

Economists expect the Trump administration’s tariff policy would generate a much lower amount of revenue than Navarro claims. Some project the total revenue would be less than half.

Roughly $600 billion to $700 billion a year “is not even in the realm of possibility,” said Mark Zandi, chief economist at Moody’s. “If you get to $100 billion to $200 billion, you’ll be pretty lucky.”

The White House declined to respond to a request for comment from CNBC about tariff revenue.

The ‘mental math’ behind tariff revenue

There are big question marks over the scope of the tariffs, including details like amount, duration, and products and countries affected — all of which have a significant bearing on the revenue total.

The White House is considering a 20% tariff on most imports, The Washington Post reported on Tuesday. President Trump floated this idea on the campaign trail. The Trump administration may ultimately opt for a different policy, like country-by-country tariffs based on each nation’s respective trade and non-trade barriers.

But a 20% tariff rate seems to align with Navarro’s revenue projections, economists said.

The U.S. imported about $3.3 trillion of goods in 2024. Applying a 20% tariff rate to all these imports would yield about $660 billion of annual revenue.

“That is almost certainly the mental math Peter Navarro is doing — and that mental math skips some crucial steps,” said Ernie Tedeschi, director of economics at the Yale Budget Lab and former chief economist at the White House Council of Economic Advisers during the Biden administration.

Trade advisor to U.S. President Donald Trump Peter Navarro speaks to press outside of the White House on March 12, 2025 in Washington, DC. 

Kayla Bartkowski | Getty Images

That’s because an accurate revenue estimate must account for the many economic impacts of tariffs in the U.S. and around the world, economists said. Those effects combine to reduce revenue, they said.

A 20% broad tariff would raise about $250 billion a year (or $2.5 trillion over a decade) when taking those effects into account, according to Tedeschi, citing a Yale Budget Lab analysis published Monday.  

There are ways to raise larger sums — but they would involve higher tariff rates, economists said. For example, a 50% across-the-board tariff would raise about $780 billion per year, according to economists at the Peterson Institute for International Economics.

Even that is an optimistic assessment: It doesn’t account for lower U.S. economic growth due to retaliation or the negative growth effects from the tariffs themselves, they wrote.

Why revenue would be lower than expected

Tariffs generally raise prices for consumers. A 20% broad tariff would cost the average consumer $3,400 to $4,200 a year, according to the Yale Budget Lab.

Consumers would naturally buy fewer imported goods if they cost more, economists said. Lower demand means fewer imports and less tariff revenue from those imports, they said.

Tariffs are also expected to trigger “reduced economic activity,” said Robert McClelland, senior fellow at the Urban-Brookings Tax Policy Center.

More from Personal Finance:
Economists say ‘value-added taxes’ aren’t a trade barrier
Tariffs are ‘lose-lose’ for U.S. jobs and industry
Why uncertainty makes the stock market go haywire

For example, U.S. companies that don’t pass tariff costs on to consumers via higher prices would likely see profits suffer (and their income taxes fall), economists said. Consumers might pull back on spending, further denting company profits and tax revenues, economists said. Companies that take a financial hit might lay off workers, they said.

Foreign nations are also expected to retaliate with their own tariffs on U.S. products, which would hurt companies that export products abroad. Other nations may experience an economic downturn, further reducing demand for U.S. products.

Tariffs could be a major rewiring of the domestic and global economy, says Mohamed El-Erian

“If you get a 20% tariff rate, you’re going to get a rip-roaring recession, and that will undermine your fiscal situation,” Zandi said.

There’s also likely to be a certain level of non-compliance with tariff policy, and carve-outs for certain countries, industries or products, economists said. For instance, when the White House levied tariffs on China in February, it indefinitely exempted “de minimis” imports valued at $800 or less.

The Trump administration might also funnel some tariff revenue to paying certain parties aggrieved by a trade war, economists said.

President Trump did that in his first term: The government sent $61 billion in “relief” payments to American farmers who faced retaliatory tariffs, which was nearly all (92%) of the tariff revenue on Chinese goods from 2018 to 2020, according to the Council on Foreign Relations.

The tariffs will also likely have a short life span, diluting their potential revenue impact, economists said. They’re being issued by executive order and could be undone easily, whether by President Trump or a future president, they said.

“There’s zero probability these tariffs will last for 10 years,” Zandi said. “If they last until next year I’d be very surprised.”

Why this matters

The Trump administration has signaled that tariffs “will be one of the top-tier ways they’ll try to offset the cost” of passing a package of tax cuts, Tedeschi said.

Extending a 2017 tax cut law signed by President Trump would cost $4.5 trillion over a decade, according to the Tax Foundation. Trump has also called for other tax breaks like no taxes on tips, overtime pay or Social Security benefits, and a tax deduction for auto loan interest for American made cars.

If tariffs don’t cover the full cost of such a package, then Republican lawmakers would have to find cuts elsewhere or increase the nation’s debt, economists said.

Continue Reading

Finance

Investors hope April 2 could bring some tariff clarity and relief. That may not happen

Published

on

Continue Reading

Finance

Cliff Asness’s AQR multi-strategy hedge fund returns 9% in the first quarter during tough conditions

Published

on

Cliff Asness.

Chris Goodney | Bloomberg | Getty Images

AQR Capital Management’s multistrategy hedge fund beat the market with a 9% rally in the first quarter as Wall Street grappled with extreme volatility amid President Donald Trump’s uncertain tariff policy.

The Apex strategy from Cliff Asness’ firm, which combines stocks, macro and arbitrage trades and has $3 billion in assets under management, gained 3.4% in March, boosting its first-quarter performance, according to a person familiar with AQR’s returns who asked to be anonymous as the information is private.

AQR’s Delphi Long-Short Equity Strategy gained 9.7% in the first quarter, while its alternative trend-following offering Helix returned 3%, the person said.

AQR, whose assets under management reached $128 billion at the end of March, declined to comment.

The stock market just wrapped up a tumultuous quarter as Trump’s aggressive tariffs raised concerns about an severe economic slowdown and a re-acceleration of inflation. The S&P 500 dipped into correction territory in March after hitting a record in February.

For the quarter, the equity benchmark was down 4.6%, snapping a five-quarter win streak. The tech-heavy Nasdaq Composite lost 10.4% in the quarter, which would mark its biggest quarterly pullback since a 22.4% plunge in the second quarter of 2022.

Continue Reading

Trending