The Job Market Collapse No One's Talking About

Hiring Is Down, Firing Is Up—and That Means One Thing: The Fed Has No Choice but to Keep Cutting

The official government jobs report was supposed to drop on Friday, October 3rd. It didn’t. Thanks to another government shutdown, the Bureau of Labor Statistics went dark. (Doug Casey and Matt Smith went over the shutdown’s broader implications in last week’s podcast, so I won’t rehash it here.)

As a result, I found myself piecing together the labor market picture from alternative sources. I’ll dive into the specifics shortly, but for now, let me just say the picture I got is pretty concerning.

Why does that matter? Because these figures tell us how healthy (or sick) the economy really is — and whether we’re sliding toward a recession.

The Numbers Are Worse Than You Think

The first jobs report I looked at was the ADP report. ADP tracks private sector employment, and it revealed that the economy lost 32,000 jobs in September. That’s the biggest decline we’ve seen in two and a half years.

I’ll admit, I thought that was bad, but it turns out that was just scratching the surface.

The Challenger report—which tracks announced job cuts—painted an even grimmer picture. So far this year, companies have announced 946,426 job cuts. That’s a staggering 55% higher than the same period in 2024, and it’s the highest year-to-date figure since 2020.

Let that sink in.

We’re approaching a million job cuts in a year when we’re not supposedly in a recession, not dealing with a pandemic, and not facing an obvious financial crisis.

The report itself notes that job cut levels this high have historically only occurred “either during recessions or during periods of transformative technology.” They’re referring to AI, of course.

What’s Really Driving the Job Losses?

But here’s the problem with the “transformative technology” explanation. If you look closer at the report, you’ll see AI isn’t the main culprit.

So let’s try to break down those 946,426 job cuts by cause to get a clearer picture.

The first thing that jumped out at me: DOGE (Department of Government Efficiency cuts) is directly responsible for 293,753 job cuts, with another 20,976 from downstream impacts.

Now, since most of those jobs were government — and, to put it lightly, of questionable value — we probably don’t need to do too much hand-wringing here.

But here’s the rest of the picture:

• Market/Economic conditions: 208,227 cuts.

• Closings, restructuring, bankruptcy, and cost cutting: Over 300,000 cuts combined.

When you add those up, you get roughly 510,000 job cuts driven purely by economic weakness.

That’s a massive figure — a clear sign of serious deterioration in labor conditions. It’s not record-breaking like 2020’s 2.3 million cuts, but it’s alarmingly high for an economy that’s supposedly “healthy.”

And what About AI?

Well, AI was cited for just 17,375 job cuts. Relatively small—for now. Though I do think this number will probably explode in the coming years as AI’s impact accelerates.

Interestingly, tariffs were also responsible for just 5,847 job cuts. Despite the headlines, tariffs haven’t turned out to be the economic wrecking ball everyone was bracing for. At least not yet.

The Job Market Is Broken

So much for the current numbers. What about the bigger picture? Anything in the trends that shows where this is heading?

Well, I actually came across one fat red flag in the most recent JOLTS report — the government’s monthly job openings survey (released just before the shutdown): job openings keep dropping.

That may not sound like much, but believe me, it’s actually pretty shocking.

Back in 2022, there were two job openings for every unemployed worker. Employers were competing for talent, offering signing bonuses and substantial pay increases. Workers were job-hopping to secure better deals. It was a job seeker’s market.

Today? There’s less than one job opening for every unemployed worker.

Think about what that means. For context, a ratio of 1.0 to 1.5 is considered normal and balanced. Above 1.5 indicates a tight labor market, where it’s hard to find workers. Below 1.0 signals excessive slack and recessionary conditions.

We’re now below 1.0. And the trend line is pointing straight down.

Not good.

The Fed’s Only Move

All of this brings us to the Federal Reserve—and why they have no real choice but to keep cutting interest rates.

As I wrote to you recently, the Fed cut rates in September. According to the CME FedWatch Tool, there’s a 96% probability they’ll cut again at their October 29th meeting. Before the dismal ADP report, those odds stood at 90%. The bad jobs data pushed the likelihood of a cut even higher.

For context, the Fed funds target range currently sits at 4.00%–4.25%. A 0.25% cut this month would bring it down to 3.75%–4.00%. Then there’s about an 86% chance of another cut at the December 10th meeting, which would lower it further to 3.50%–3.75% by year’s end.

And this rate-cutting cycle isn’t stopping there. The market is pricing in continued cuts throughout 2026.

Why does this matter?

Because Powell’s term is up in May 2026 — right as markets expect cuts to keep rolling. If Trump swaps him out for one of his own, someone who shares his appetite for easy money—like Stephen Miran, which he’s clearly gearing up to do—it could supercharge the easing cycle, send the money printer humming again, and push markets into overdrive.

What This Means for You

If you’re an investor in stocks, precious metals, or commodities, the situation isn’t necessarily a bad thing. Here’s Doug Casey:

Money printing means more bubbles will be created. And while bubbles are the enemies of a sound economy, they’re the friend of the speculator. The current mania in Bitcoin is an example.

In particular, I’m looking forward to a bubble in commodities in general, and precious metals in particular. And not just a bubble, but a hyper bubble in mining stocks.

But if you’re a worker—particularly in a sector vulnerable to slowdowns, restructuring, or automation—it’s a different story. Especially if you don’t own “unprintable” assets like gold.

The labor market is weakening faster than most people realize. Job cuts are accelerating. Opportunities are shrinking. And the Fed is responding the only way it knows how: by making money cheaper and gradually getting that money printer running again.

That means one thing: inflation’s about to take another bite out of your wallet.

Regards,

Lau Vegys

P.S. The Fed’s inevitable return to the printing press is exactly why so much of our Crisis Investing portfolio is positioned in carefully chosen gold stocks—many of which Doug himself owns. In fact, the latest issue features a compelling gold pick set to benefit not only from gold’s astronomical rise but also from a transformative deal that significantly expands its growth potential. If you’re a paid subscriber, don’t miss it. And even if you’re not, I’d recommend checking out the lead story—it’s free and dives deeper into why this gold bull market still has a long way to run.