AI Gains, Jobs Slow
What has President Trump said this week?
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What has President Trump said this week? 〰️
1. November Job Data
U.S. private payrolls unexpectedly fell by 32,000 jobs in November, the largest decline since 2023 and a sharp miss from economists’ expectations for modest growth (Reuters, 2025). The weakness was concentrated among small businesses, which shed roughly 120,000 jobs, while mid-sized and large firms continued to expand headcount (Bloomberg, 2025).
The data reinforces concerns about a potential “jobless boom,” where output and productivity rise even as hiring slows, an effect some analysts link to accelerated AI adoption and cost pressures from tariffs (CNN, 2025). Commerce Secretary Howard Lutnick has pushed back on this interpretation, arguing the slowdown reflects temporary factors such as the government shutdown and immigration-policy changes, rather than structural or tariff-driven weakness (CNBC, 2025). Still, repeated declines in recent months, particularly among small companies, suggest increasing caution around hiring and investment.
For monetary policy, the softer-than-expected report increases pressure on the Federal Reserve to consider another rate cut at its December meeting. Futures markets have raised the implied probability of additional easing, seeing weaker hiring and slower wage growth as consistent with a more subdued inflation outlook (Bloomberg, 2025). For investors, this mix, slowing job creation but continued economic expansion, supports a more selective approach, focusing on exposure to small-business demand, automation trends, and rate-sensitive sectors, while noting that lower interest rates could cushion financing conditions even as labor-market risks grow.
2. Powell and the Path of Interest Rates
President Trump has indicated that he already has a preferred candidate to replace Federal Reserve Chair Jerome Powell when Powell’s term expires next year, fueling talk of a “shadow Fed chair” shaping expectations well ahead of any official transition (Yahoo Finance, 2025). Reporting suggests National Economic Council Director Kevin Hassett has emerged as the leading contender, with Treasury Secretary Scott Bessent overseeing the search and calling for a broader reassessment of the Fed’s mission and communication strategy (CNBC via Glideslope AI, 2025). Even the perception of an incoming leadership shift could influence how markets assess the future path of interest rates and the balance between inflation control and growth support.
Wall Street’s immediate focus is the December Fed meeting, where investors assign a high probability to another rate cut following two earlier reductions this year (Forbes, 2025). Market participants are scrutinizing recent remarks from Powell and other officials for signs of internal divisions, between hawks worried about inflation and financial stability, and doves emphasizing softening labor data and the prospect of a “jobless expansion” (CNN, 2025). At the same time, political and legal scrutiny of the Fed’s independence, including potential Supreme Court rulings on regulatory authority,adds uncertainty about how insulated future policy decisions will remain from White House preferences.
For capital markets, the combination of a likely December cut and a potential leadership shift carries meaningful implications. Lower policy rates support valuations for duration-sensitive assets, reduce financing costs, and keep leveraged deals viable, but also signal rising concern about slowing growth and employment. A chair more aligned with the administration’s preference for easier policy could anchor expectations around a “lower-for-longer” rate environment, with ripple effects on the dollar, credit spreads, and cross-border capital flows. Investors may need to prioritize interest-rate risk management, refinancing opportunities, and sensitivity to changes in the Fed’s reaction function as both personnel and macro conditions evolve.
3. Russia–Ukraine War: Peace Economics
Russia’s economy remains under significant strain as the war in Ukraine continues, with sanctions and heavy wartime spending weighing on growth, investment, and fiscal stability (Bloomberg, 2025). In parallel, the Trump administration’s proposed 28-point peace plan aims not only to halt active hostilities but also to outline a framework for Ukraine’s reconstruction and Russia’s phased reintegration into the global economy (Axios, 2025). A central feature is the use of more than $300 billion in frozen Russian sovereign assets to finance rebuilding and to seed new investment mechanisms tied to future cooperation.
Provision 14 of the plan specifies how these frozen funds would be allocated. It calls for $100 billion in Russian assets to be invested in U.S.-led reconstruction and development initiatives in Ukraine, with the United States receiving 50% of the resulting profits (CSIS, 2025). Europe would contribute an additional $100 billion to expand the reconstruction pool, with European-held Russian assets unfrozen as part of the broader settlement (BBC, 2025). The remaining Russian funds would go into a separate U.S.–Russia investment vehicle for joint projects intended to create long-term economic interdependence and incentives for stability. The plan, however, remains incomplete and has not been accepted by any of the parties involved (CSIS, 2025).
For the United States, the structure offers potential strategic and financial benefits: a central role in reconstruction, a sizeable share of profits from deployed Russian assets, and a controlled framework for selective re-engagement with Moscow. For Europe, it provides a pathway to unlock frozen funds and share reconstruction burdens with Washington, but also raises complex legal and political concerns around sovereign immunity and precedent. Even if Russia cannot access the assets, questions remain about whether they can legally be seized, an issue with significant implications for the global financial system. The broader economic impact will hinge on whether a peace agreement is ultimately reached and how the plan’s economic provisions are defined, negotiated, and implemented.