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• Nike is set to post fiscal second-quarter results after the closing bell Thursday, with sales and profits expected to decline as the company weathers the impact of higher tariffs.
• Options pricing suggests traders see Nike's stock moving nearly 7% in either direction after the results.

Nike is set to post quarterly earnings after the market closes Thursday, with traders anticipating a big move from athletic apparel maker's stock following the results.

Current options pricing suggests traders expect Nike's (NKE) stock could swing up to 7% in either direction by the end of the week. A move of that size from Tuesday's close around $67 would push the stock up to around $72 at the high end, its highest level in two months though still in negative territory for the year. At the low end, the stock could drop down to $62.

While up from their April lows in the wake of President Trump's "Liberation Day" tariffs announcement, the shares are still down about 11% year-to-date. It hasn't been an easy year for Nike, which continues to grapple with a number of challenges as part of its turnaround plan under CEO Elliott Hill, who took over last October, and higher tariffs haven't helped.

Nike topped sales estimates when it last reported results in late September, but noted that persistent uncertainty around tariffs was negatively impacting its business, and profits declined. The company said at the time that tariffs could cost it about $1.5 billion annually, up from a previous forecast of $1 billion.

Nike's results this week could show whether the company is making progress in its turnaround plans, though analysts have warned Nike may need more time, especially as it weathers the impact of higher tariffs.

Nike is projected to post earnings per share of $0.38 for the fiscal second quarter, roughly half of what it reported a year earlier, according to estimates compiled by Visible Alpha. Its revenue is seen falling 1% year-over-year to $12.23 billion.

Ahead of Thursday's report, Bank of America analysts said Nike's third-quarter revenue outlook will be the key metric to watch Thursday, as analysts and investors look for a sales inflection back to consistent growth. The consensus estimate of analysts surveyed by Visible Alpha at $11.46 billion would represent a close to 2% rise from the same period a year ago.

Of the 13 analysts with current ratings tracked by Visible Alpha, eight consider Nike's stock a "buy," compared to four neutral ratings, and just one "sell" rating. Their mean target close to $82 would be Nike's highest level since February.

Take A Number: A Striking Figure In Economic News Today

• Kevin Hassett, the frontrunner to be the next chair of the Federal Reserve, wants to bring inflation down to 1%.
  
• A 1% inflation rate would be the lowest since the Obama administration, other than the pandemic.
  
• Most forecasters do not expect inflation to get down below 2% for years.
  

If you could turn back the clock on inflation, a good date to pick might be July 2016.

That was the last time the Consumer Price Index rose by less than 1% over 12 months when there wasn't a pandemic disrupting the global economy.

Kevin Hassett, director of the National Economic Council, predicts that could be the U.S. economy's future as well. Hassett believes the economy can get back to the days of the late 20-teens, when the economy was growing fast, and inflation was nice and low, all while the Federal Reserve keeps interest rates near rock bottom.

"We got 3% growth and 1% inflation after a big supply side shock," Hassett said Tuesday in an interview on CNBC. "And I think that's what could happen again."

A 1% inflation rate would be beneficial to the pocketbook: prices would double approximately every 72 years, compared to every 24 years under today's inflation rate of around 3%.

Inflation of 1% combined with 3% economic growth, as Kevin Hassett says, is possible; however, it would be a remarkable combination that few forecasters expect to see anytime soon.

Getting there would be difficult. Inflation hasn't been under the Fed's official target rate of 2% since 2021, and most forecasters don't expect it to return to that level for years.

Hassett believes that Trump's economic policies will eventually lead to lower inflation. He may yet get a chance to put that theory into practice. Although Hassett is no longer the dominant frontrunner to succeed Federal Reserve Chair Jerome Powell when his term ends in May, prediction markets have him favored over the next closest contender, former Federal Reserve Governor Kevin Warsh.

• While artificial intelligence spending will likely boost the economy next year, the new technology could have farther reaching impacts on the economy, Federal Reserve Chair Jerome Powell said recently.
• AI could contribute to rising productivity, but the central banker also warned that job losses may be another result of the technology's adoption.
• The benefits from technology spending on the economy are clear, Powell said, but officials are still waiting to see what kind of impacts AI will have on productivity and the labor market.
  

Artificial intelligence will give the economy a lift in 2026, but it could also be coming for your job, according to Federal Reserve Chair Jerome Powell.

Powell laid out both the near-term and long-run implications of AI for the economy during a press conference last week after the Fed announced its third interest rate cut in as many meetings. Today, AI infrastructure spending is boosting business investment, which the Fed is factoring into its economic projections. And the new technology could also improve productivity, even as labor market woes could be coming, Powell said. 

AI-driven investment has the potential to shape the path of the economy, with implications for wages, corporate profitability and the labor market. Understanding these dynamics is essential for interpreting shifts in the global economy as well as for navigating personal financial decisions within it.

“It could have productivity implications, while also having social and labor market implications that we don't have the tools to deal with,” Powell said of the burgeoning technology.

At last week’s meeting, Fed officials raised their forecast for economic growth in 2026, pegging GDP growth at 2.3%, up from a September projection of 1.8%. And Powell said a key driver of economic growth will likely be investments in AI technology.

“AI spending on data centers, and related [things], has been holding up business investment,” Powell said. “AI spending will continue. The consumer continues to spend. So it looks like the baseline would be solid growth next year.”

The Fed points to the economic impact of spending on things like new warehouse-sized data centers and billions of dollars in cutting-edge new chips needed to power them. In fact, an analysis by Harvard economics professor and former Obama economic advisor Jason Furman showed that investment in computer equipment accounted for 92% of GDP growth in the first half of 2025. 

Powell added that AI could help keep business growth strong for now, but might have broader implications for the job market in the future.

“If you look at what AI can do and if you use it in your personal life, as I imagine many of us have, you can see the prospects for productivity,” Powell said. “I think it makes people who use it more productive. It may make other people have to find other jobs, though.” 

Productivity, which measures economic production for hours worked, rose in the second quarter by 3.3%, according to the latest Bureau of Labor Statistics data. Economists say productivity growth can lead to gains in wages, corporate profits and living standards.

The trend of higher productivity dates back to the start of the decade, Powell said. Most of the recent productivity growth is likely tied to automation and other changes made during the pandemic, but AI may now be starting to have its own impact. 

“We're definitely seeing higher productivity. I think it's a little quick to be saying it's generative AI,” Powell said. “The pandemic may have induced people to do more automation and do more things with computers to replace people, and that raises productivity.” 

Meanwhile, the Federal Reserve is also factoring a weaker labor market into its forecast, some of which may be the result of business adoption of AI. While some companies have cited AI adoption as part of announced layoffs, there hasn’t yet been a surge in unemployment claims, a fact that Powell described as “curious.”

“It's probably part of the story. It's not a big part of the story yet. We don't know whether it will be,” Powell said of AI’s impact on the job market.

• SpaceX's reported pursuit of a $1.5 trillion valuation in an IPO next year would add hundreds of billions of dollars to Elon Musk's wealth.
• Between his recently approved pay package at Tesla, his existing shares of the auto-turned-robotics company, and his other private companies, Musk's wealth would rival some countries' annual economic output.

Elon Musk, the world's wealthiest person, is well on his way to becoming a trillionaire.

Musk's private space exploration company, SpaceX could hand him that superlative as soon as next year—when it will reportedly list on public exchanges, targeting a market valuation of $1.5 trillion. A massive SpaceX initial public offering alone could double his net worth, push him into 13-digit territory.

But wait, as they say: There's more. Counting Musk's shares in that startup, tunnel-building firm The Boring Company, brain-mapping startup Neuralink, xAI—and Tesla (TSLA), which recently approved a new pay package for theC—the entrepreneur's estimated future net worth could swell to a level comparable to some countries' annual economic outputs.

Musk has denied recent reports that SpaceX was raising money at an $800 billion valuation, but he also appeared to confirm the company's IPO plans in a response last week to a social media post on X. (The $800 billion appears instead to refer to the valuation at which the company recently said it would buy back some investors’ shares.)

Musk has said that his personal wealth is less important to him than his influence, the latter of which is poised to grow as his futuristic businesses fetch growing valuations in both public and private markets.

A basic calculation would put Musk's SpaceX stake at around 40%. That would mean his SpaceX shares could be worth more than $330 billion today—and some $625 billion assuming a market valuation of $1.5 trillion for the company in 2026.

Add that $330 billion figure to the value of his current Tesla holdings—the company’s stock touched a record high on Tuesday—and that brings you to roughly $600 billion now, and about $900 billion should SpaceX command the public valuation currently anticipated. (Both the Bloomberg and Forbes' billionaires lists now have Musk clear of $600 billion.)

And if Musk achieves all the milestone-linked awards tied to his Tesla compensation package, and drives the auto-turned-robotics company's market capitalization to $8.5 trillion, his implied net worth would rise even further, exceeding that of most countries' current annual gross domestic product as estimated by the International Monetary Fund.

Musk's cup would run over even if his other private startups' valuations don't change. He reportedly owns a third of artificial intelligence company xAI, which includes social media company X; it was valued at around $230 billion, according to The Wall Street Journal. While details of his stakes in The Boring Company and Neuralink couldn't easily be determined, the companies were recently valued at over $5 billion and $9 billion, respectively.

Tesla, SpaceX, x.AI, and Musk did not respond directly to Investopedia's emailed queries. But for Musk, a trillion-dollar title seems very much in view.

• The Consumer Price Index likely rose 3.1% over the year in November, its highest since May 2024.
  
• Tariffs have contributed to increased inflation, despite a cooling of price increases for housing.
  
• Forecasters expect inflation to settle down next year as tariff price hikes are expected to come to an end.
  

High inflation just won't die. At least not yet.

A belated report Thursday is likely to show the Consumer Price Index rose 3.1% over the year in November, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. That would be up from 3% in September and mark the highest annual inflation since May 2024. Core inflation is expected to have risen 3% over the year, the same as September, by the median forecast.

Inflation has steadily risen since April, when President Donald Trump announced steep import taxes against nearly every U.S. trading partner. Businesses have passed on some of the tariff costs to consumers, pushing up overall inflation even as price increases for some important categories unaffected by tariffs, such as rent, have cooled down.

Accelerating inflation would worsen the dilemma faced by the Federal Reserve, which aims to keep inflation running at a 2% annual rate and has failed to do so since 2021.

Inflation had nearly cooled to that point in January after surging during the pandemic, but tariffs have kept it stubbornly high. Some members of the Fed's policy committee have argued for keeping the central bank's key interest rate high to discourage spending and quell inflation. However, they have been outvoted by the majority, which has favored cutting rates to boost the faltering job market.

With inflation still running hot, expect prices for necessities to keep increasing at a faster clip than you were used to before the pandemic, especially for anything that's imported.

The BLS's November inflation report was originally scheduled to be published eight days earlier, but was delayed. The bureau had to play catch-up after the government shutdown in October and November disrupted data collection for all statistical agencies. The Bureau said it would not publish a report for October at all, leaving an unprecedented gap in the data.

Many forecasters expect inflation to start cooling off later in the year as tariff price hikes will have worked their way through the system.

"The lingering effects of tariffs are likely to cause a further uptick in goods inflation over the next few months as firms revisit pricing early next year, but we expect overall inflation to hold near 3.0% through the first half of 2026," forecasters at Wells Fargo Securities, led by Sarah House, wrote in a commentary. "As the year progresses, we anticipate easing tariff pressures, a soft labor market and solid productivity gains will spur a gradual descent toward 2%."

• Tesla's stock climbed to an all-time high Tuesday, setting its first record in a year, as investors buy into the electric vehicle maker's plans for autonomous driving, robotics, and AI.
• Tesla launched a pilot of its robotaxi program in Austin earlier this year, and analysts say improvements to its self-driving software could allow the program to expand quickly.

Tesla's (TSLA) stock is powering up, notching its first record high in a year.

The shares added about 3% Tuesday to finish near $490, their highest level since last December's close at $479.86.

The electric vehicle maker's stock has been on a strong upward run in recent months, more than doubling from their lows in March as enthusiasm for CEO Elon Musk's renewed commitment to the company and plans for autonomous driving, robotics, and AI have driven a comeback. 

Over the weekend, Musk posted on social media that Tesla is testing fully autonomous robotaxis, which could be a sign that safety monitors are on their way out. Tesla launched a pilot program of its self-driving robotaxis in Austin, Texas earlier this year, but still had a Tesla employee in the driver's or passenger's seat for rides until recently.

Bullish analysts at Mizuho on Monday hiked their price target for the stock to $530 from $475, writing their research indicates the effectiveness of Tesla's self-driving software continues to improve, and has reached the ability to operate over 99% of the time without a driver having to intervene. The analysts said that the software's improvement could lead to faster expansion of the robotaxi program, and remove the need for a safety monitor.

It's been a challenging year for Tesla's electric vehicle sales. However, the company's developments in self-driving software, robotaxis, humanoid robots, and AI have helped boost enthusiasm for its stock.

Wedbush analysts, with a Street-high target of $600, said this week that they "believe Tesla is taking major steps in advancing its AI Revolution path with autonomous and robotics front and center heading into 2026."

Other analysts on Wall Street aren't as convinced, however. Of the 12 analysts with current ratings tracked by Visible Alpha, just six or about half consider the stock a "buy," compared to three "hold," and three "sell" ratings. Their average target around $400 would suggest an 18% decline from Tuesday's close.

This article has been updated since it was first published to reflect more recent stock prices.

• Approximately 10% of borrowers in September took out an adjustable-rate mortgage to purchase a home.
• Adjustable-rate mortgages contributed significantly to the 2008 housing crisis, as many borrowers with poor credit struggled to make payments when their rates increased.
• However, mortgage experts said lending standards have improved since then, reducing the likelihood of widespread impacts on the housing market.

High mortgage rates have been overwhelming homebuyers for the past three years, and some are turning to a mortgage option that helped fuel the 2008 housing crisis.

Adjustable-rate mortgages (ARMs) offer fixed introductory rates that later adjust—typically to a higher rate—to reflect current market conditions. These loans are becoming more popular with homebuyers as mortgage rates remain persistently above 6%.

While those homeowners risk having a bigger monthly mortgage payment in a few years, housing industry officials said better lending standards are minimizing the dangers of these loans.

"In the current timeline, these buyers still are at minimal to low risk," said Phil Crescenzo Jr., vice president of the Southeast Division at Nation One Mortgage Corporation, in an email interview.  

Rising ARM usage underscores how sustained affordability pressures are reshaping household behavior within the broader U.S. economy. As borrowers gravitate toward loans that reduce payments in the near term, even at the risk of higher costs later, it reflects the strain that elevated interest rates, tight housing supply, and slow income growth continue to place on family budgets.

Data from the Mortgage Bankers Association show that use of ARMs has increased in the past three years. About 10% of borrowers in September opted for the loan, compared to 6% of buyers who used ARMs after the 2008 housing crash. ARMs are also increasingly being used in new home purchases. In October, they accounted for a quarter of home purchases, up from 16% in the same month of the prior year.

“In this environment where borrowers are struggling with lack of affordability, moving to an ARM can result in real savings,” wrote MBA Deputy Chief Economist Joel Kan.

When mortgage rates were at their recent lows in 2021—falling below 3% at times—usage of ARMs dropped off, too, MBA data showed. However, after mortgage rates rose by more than three percentage points in 2022, at times surging over 7%, borrower demand for adjustable-rate loans responded in kind.

ARMs can offer home buyers significant savings. According to MBA data, a five-year ARM loan in October offered borrowers an initial rate of 5.58%, compared to the 6.37% rate for traditional mortgage loans over the same period. For a $400,000 loan, the savings in monthly payments could be approximately $200 a month. 

One reason more borrowers are relying on ARMs is that the adjustable-rate loan has become a better value in 2025 as short-term interest rates have declined, providing a more favorable introductory rate, Kan wrote. 

“It is not surprising that the ARM share has increased, and we expect it will increase further in 2026,” Kan wrote.

ARMs typically offer a lower introductory rate that increases after a specified period. For example, the commonly used 5/1 ARM offers a five-year introductory rate, and is then adjusted each year after that. The terms often include a cap on the maximum rate.

For ARM borrowers, it's often a matter of timing, as they may be stuck with higher rates once the introductory period ends.  

“If you are a homeowner with this loan, you would watch the market to refinance into a fixed rate and avoid the adjustable period altogether,” Crescenzo Jr. said.

If rates are higher when the introductory period expires, he explained, the borrower might be hit with higher payments that they can't afford.

That was what set off the housing market meltdown that came to fruition in 2008, when borrowers with poor credit ratings saw their adjustable-rate mortgage payments skyrocket. Many couldn’t make the payments, resulting in a wave of defaults that sent the housing market reeling.

But Kan said lenders are now applying stricter credit standards, including evaluating the borrower's credit rating against the current mortgage rate, not just the introductory rate. Furthermore, ARM usage peaked at 35% in 2005, well above current levels.

“Most ARM loans now have fixed terms of 5, 7, and 10 years and borrowers are underwritten to the fully indexed rate and are significantly less risky than ARM loans originated before 2008,” Kan wrote. “Additionally, borrowers who qualify for ARMs tend to have better credit profiles.”

• Bank of America's Bull & Bear Indictor rose last week to within a tenth of a point from flashing "sell," a sign that high expectations and aggressive investor positioning could pressure stocks in the coming months.
• The indicator has sent two sell signals this year, but neither preceded a prolonged stock slump.

Professional money managers are feeling better about the stock market than they have in years. That may be cause for caution. 

The smart money is more bullish than at any time since July 2021, according to Bank of America’s December Global Fund Manager Survey, which showed optimism about the economic outlook at multi-year highs and cash levels at record lows. That may sound bullish—but the reading has pushed BofA’s "Bull & Bear Indicator" up to 7.9, a tenth of a point away from what the bank considers a "sell signal.”

Why is that? The indicator is premised on the idea that market returns are driven by positioning, profit, and policy. The best time to buy risk assets, according to BofA, is when investor positioning is extremely bearish, profit expectations are recessionary, and policymakers are stimulating the economy—and the best time to exit is when positioning is bullish, profits are expected to skyrocketed, and policy is tightening.

Investor sentiment is often a pivotal factor determining how the stock market responds to economic data, policy decisions, and corporate news. Excessive optimism can cause investors to overlook warning signs, while excessive pessimism can lead investors to overstate the significance of negative signals.

Positioning is extremely bullish today, according to BofA. Fund managers' cash levels were at a record-low 3.3% when the survey was conducted between Dec. 5 and 11. Investors are more overweight stocks and commodities—a reflection of risk appetite—than any point since February 2022.

Optimism about corporate profits is also running high. Nearly two-thirds of surveyed investors expect global earnings to increase over the next year, the largest share since August 2021. (A FactSet analysis estimates full-year 2025 earnings growth at above 12%, above the 10-year average.) Only 3% of those surveyed expect the global economy to fall into a recession over the next year. 

Policy, meanwhile, isn't looking too restrictive at present. Last week, a divided Federal Reserve cut interest rates for the third time this year, electing to support a weakening labor market despite signs inflation is sticking above its 2% target. Labor market data released Tuesday could bolster arguments to continue cutting rates early next year. The tax bill signed into law by President Donald Trump in July is also expected to boost economic growth next year.

The Bull & Bear Indicator has flashed “sell” 16 times since 2002. More often than not, the S&P 500 rises in the three months after a sell signal. But historically, pullbacks have been larger than advances, and the index posted an average three-month return of -1.4% during those 16 periods.

The indicator has sent two sell signals this year, in July and October. Both came about a month before stretches of exceptional volatility, but neither foretold a prolonged slump. The S&P 500 rose 7.5% in the three months that followed July’s signal. Since the alarm went off in October, the index is up about 1%. 

Some other sentiment measures are flashing some concern, but don't appear overly dramatic. CNN's Fear & Greed index was recently in a neutral range, less bearish than in recent weeks. And the weekly AAII survey of individual investor sentiment has lately tipped bullish or neutral after recovering from more downbeat readings last month. The VIX, Wall Street's "fear gauge," remains in a zone generally denoting calm.

Investors are increasingly concerned about the AI trade that’s defined the bull market of the past three years. Nearly 40% of investors said an AI bubble was the biggest risk facing markets next year. Nearly 20% said the biggest threat to stocks was a “disorderly rise in bond yields.” 

When asked what would be the most likely cause of distress in credit markets, nearly 30% of those surveyed said “AI hyperscaler capex,” the second-most common response. December’s survey marks the first time respondents have expressed any concern that AI spending could destabilize debt markets.

Investor concerns about big tech’s massive spending on AI infrastructure have been a headwind for tech stocks in recent months. The Roundhill Magnificent Seven ETF (MAGS) is down about 4% since hitting a record high in late October. On Monday, one-time darlings of the AI trade, Nvidia (NVDA) and Oracle (ORCL), were trading about 15% and 40% below their respective all-time highs. 

• Ford is pulling back on parts of its EV strategy as the automaker says it is looking to respond to consumer preferences.
• The automaker said it expects to take on about $19.5 billion in one-time charges as part of a restructuring.
  

Ford's (F) electric vehicle strategy is changing gear.

The automaker announced a major shift in its EV plans late Monday, with the company expecting to take on about $19.5 billion in one-time charges to account for the costs of a restructuring plan that will see the automaker focus more on hybrid and plug-in vehicles, while pulling away from pure EVs. Ford said it plans to recognize most of the $19.5 billion in charges during the fourth quarter, with about $5.5 billion in cash effects to be paid through 2027.

“This is a customer-driven shift to create a stronger, more resilient and more profitable Ford,” Ford CEO Jim Farley said in a statement. “The operating reality has changed, and we are redeploying capital into higher-return growth opportunities."

The next generation of Ford's F-150 Lightning electric truck will now be an extended-range EV rather than a fully electric vehicle. Ford said its plans to start introducing smaller, more efficient and affordable EVs remain on track for 2027.

Ford is the latest automaker to scale back parts of its electric vehicle plans, in what could underscore a broader trend as demand in the U.S. has fallen amid concerns about costs with the expiration of EV tax credits, and charging infrastructure, among other things.

Ford said its electric vehicle unit should be profitable by 2029 after making these changes, and that some of its battery-producing plants will shift to making stationary batteries for homes, businesses, and data centers.

General Motors (GM) and other automakers have made changes to their EV plans as well in recent months, anticipating a drop in demand after a $7,500 EV tax credit expired at the end of September. Automakers are also facing less pressure to shift to more sustainable vehicles, as the Trump administration has loosened emissions requirements.

Ford said it expects that by 2030, about half of its vehicle lineup will be made up of a combination of hybrids, EVs, or extended-range EVs, compared to about 17% of its lineup today.

Ford shares were little changed in recent trading. They have gained nearly 40% since the start of the year.

• The uptick in unemployment in November shows that the Federal Reserve was justified in cutting interest rates earlier in the year, economists said.
  
• The Fed is expected to pause its rate-cutting campaign in January to assess the impact of cuts so far, but the poor jobs report kept a January cut on the table.
  
• The Fed is cutting borrowing costs in hopes that easier money will boost spending and hiring.
  

An unexpected jump in the unemployment rate Tuesday kept pressure on the Federal Reserve to rescue the job market by cutting interest rates.

Fed officials—concerned about the health of the labor market and left with limited data to go on during the government shutdown—opted to cut the central bank's key interest rate last week for the third time in as many meetings.

Tuesday's jobs report kept those worries alive when it showed the unemployment rate rose to 4.6% in November from 4.4% in September, reaching a fresh high since 2021.

The faltering job market makes the Federal Reserve more likely to lower borrowing costs, which could boost the economy and potentially prevent a surge of unemployment.

Fed officials have been divided over how best to pursue the central bank's dual mandate from Congress to keep inflation low and employment high, at a time when the economy isn't cooperating with either objective.

One faction prefers to keep interest rates higher for longer to crush inflation that's still over the Fed's goal of a 2% annual rate. Another prefers faster rate cuts to prevent unemployment from rising severely. The federal funds rate influences borrowing costs on short-term loans, allowing the central bank to discourage spending with high, "restrictive" rates or encourage it with lower ones.

Tuesday's job market report gave ammunition to the rate cut advocates, although it didn't settle the debate.

The Fed will get another jobs report before its next meeting, as well as several reports on inflation, which could tip the balance one way or the other. The Fed may also take the data with a grain of salt, as the government shutdown in October and November interfered with the Bureau of Labor Statistics' ability to conduct the surveys used to compile the report.

As of Tuesday, financial markets were pricing in a 24% chance of a January cut, and a likelihood of one additional cut at some point in 2026, according to the CME Group's FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

The details of the report, however, were mixed enough that some economists could argue that the job market is sufficiently resilient, suggesting there's no urgency for the Fed to rescue it with rate cuts.

"The private sector nonfarm employment readings for November and October signal that while net hiring remains soft and narrowly based, it is not softening further and in fact is moderately firmer than the weak readings in the summer,"  Kathy Bostjancic, chief economist at Nationwide, wrote in a commentary.

Several economists said the report showed Fed officials were right to cut interest rates earlier in the year but that further cuts were not necessarily a done deal, at least not right away.

"Today’s data should be treated with some caution, but it shows a labor market drifting further away from full employment, meaning the Fed’s three rate cuts to end 2025 were well justified," Preston Caldwell, chief U.S. economist at Morningstar, wrote in a commentary. "

"If today’s data is confirmed by subsequent readings, we could see two or three rate cuts in the first half of 2026, rather than the single cut priced in by the market as of yesterday," he wrote. "On the other hand, we think it’s still very likely the Fed pauses in January, as it will take some time to see how the rate cuts at the end of 2025 impacted the economy."

In recent months, several Fed officials have voiced concerns that employers have curtailed hiring, at least partly because of uncertainty surrounding President Donald Trump's campaign to raise import taxes on nearly every U.S. trading partner.

"This report bolsters the way we have been thinking about the Fed’s current policy approach,"  Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management, wrote in a commentary. "The delivery of 'insurance' cuts over the past few months was prudent and brought rates to a more neutral level. One additional cut may be appropriate in the first quarter of 2026, but the economy looks stable enough to heed patience in taking additional action."