Dear Reader,
Good morning.
Simmy Adelman here with Behind the Markets.
Back in July, we wrote about something that was hiding in plain sight.
Jobless claims had just hit a 57-year low — the lowest level since the week of August 31st, 1969.
The headline looked great.
But underneath it, something else was happening.
Companies weren't firing anyone.
But they weren't hiring anyone either.
The labor market wasn't booming.
It was frozen.
AI was boosting productivity enough that companies could get more out of the workers they already had without adding new ones.
We called it the low-hire, low-fire market.
And we said that while the surface looked calm….
Underneath, things were changing faster than most people realized.
Friday morning, the freeze cracked.
The Numbers
The September jobs report came in at 29,000.
Economists were expecting 90,000.
The unemployment rate ticked up to 4.2% from 4.1%.
Wage growth slowed to 3% annually — the lowest since May 2021.
And July and August were both revised down by a combined 60,000 jobs.
That means the labor market has been weaker than anyone thought for months.
The headline numbers were lying.
This isn't a soft labor market.
This is a labor market that stalled.
What the Market Did
Stocks rallied on the news and yields fell.
Oil slipped below $100 for the first time in weeks.
Fed hike odds for October collapsed from 70% to roughly 23%.
In a single Friday morning, two of the biggest fears hanging over this market — another rate hike and persistent oil pressure — both eased at once.
That's why stocks went up Friday.
But here's what I want you to hold onto heading into this week.
The market celebrated weak jobs data because it means the Fed probably won't hike next month.
That's a short-term trade.
The long-term question is more serious.
29,000 jobs is not a healthy economy.
It's an economy that is slowing.
The Midterm Angle
This is the second-to-last jobs report before the November 4th midterm elections.
The final one drops November 1st — three days before voters go to the polls.
29,000 jobs.
Unemployment ticking higher.
Wage growth at its lowest in five years.
Dylan has said many times on this channel — when people can't buy what they could afford six months ago, they get angry.
When they're angry, they vote for change.
The Walmart Recession Signal we wrote about in August hit its highest level since the 2008 financial crisis.
Ground beef at $7.14 a pound.
Consumer confidence near 12-year lows.
Credit card debt at record highs.
And now the weakest jobs number of the year landing six weeks before voters go to the polls.
That is a very uncomfortable picture for the party in power.
And a very important backdrop for investors.
Because a slowing economy is exactly when the weak spots in the system get tested.
And Dylan just found one most investors have never heard of.
It's sitting inside your bank.
In his new report, he shows how one hack at one of America's five biggest banks could set off a bank run that's over in four hours.
While the whole country sleeps.
No lines.
No crowds.
The first bank run in history with no people in it.
He also names the December 31st federal deadline the big banks are racing to beat...
And how to get the name of the one company they're paying to stop it.
If you have money in a bank, you'll want to see this before December 31st.
The Bigger Picture
Back in July we said the labor market looked calm on the surface.
Underneath, things were changing faster than most people realized.
Friday confirmed it.
The freeze is thawing.
The question now is whether this is just a blip — or the beginning of a genuine slowdown.
We'll know more when October's number drops the week before the election.
But for now, the picture heading into the most consequential midterm in a generation is: weak jobs, elevated inflation, oil above $100, yields at 24-year highs, and a consumer that is quietly running out of runway.
We’ll be watching the market very closely.
Have a wonderful Monday.
Simmy Adelman, Editor-in-Chief
Behind the Markets
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Written by Simcha Adelman