(NewsNation) — After a pair of concerning private employment numbers, Thursday’s weekly unemployment report will be the last batch of data the Federal Reserve will see before its interest rate vote this month.
The new data drop comes amid reports of a cooling economy, most notably in the labor market. Payroll processor ADP released its latest report Wednesday, showing that private employers lost 32,000 jobs in November. Some economists expected to see approximately 40,000 jobs added. Private employers have now cut jobs in four of the last six months.
Meanwhile, bankruptcy filings for small and large businesses, as well as individuals, have hit a five-year high. A report from the American Bankruptcy Institute shows more than 53,000 filings in October, up 12% from this time last year.
Despite the holiday cheer coming from retailers after a weekend shopping bonanza, companies and small businesses are starting to crack under the weight of a weakening economy and rising costs.
But while this economic news may be bad in terms of the data, it’s good news for rate watchers. The probability of a rate cut has swung dramatically over the last few weeks, and right now, markets have bumped the probability of a 25-basis point cut to nearly 90%, according to Fidelity.
The Fed is still making its decision relatively blind, due to a lag in data after the government shutdown. Most economists and analysts say a cut is only part of the solution to helping the labor market. Finding a way to tackle inflation is another part of the challenge, but a rate cut would likely only make that worse.