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Let's turn now to the economy and a disappointing new jobs report today showing employers cut 92,000
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jobs in February. The report also included downward revisions for the previous two months and
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a slight rise in the unemployment rate from 4.3 to 4.4 percent. All together, it paints a
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picture of a labor market struggling across a number of sectors, including some that were
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engines of recent growth, like health care and construction. Stocks fell on the news,
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capping a week of declines along with a rapid rise in oil and gas prices, a result of President
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Trump's war with Iran. The average price of a gallon of gas rose 11 percent this week.
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To unpack today's numbers, we turn now to Diane Swank, chief economist at KPMG that's
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attacks an advisory firm. Diane, good to see you. So with the usual caveat, it's important not
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to overreact to one month of data. The losses in today's report were widespread. What does all
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this tell you about the economy? Well, part of the losses in health care, this was the one sector
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that was really sort of the one-legged stool holding up the overall labor market. And we had a
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major strike in California and Hawaii that shapes 27,000 health care worker jobs off with some
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collateral damage as well in the unemployment rate with temporary layoffs. So that was part of it,
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but even taking that out, it still was a lot of red ink. And when you lose the one stool holding
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you up, you go negative and the unemployment rate rises. There's been a lot of talk about employers
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having to navigate uncertainty around shifting tariff policies. How big a factor is that uncertainty
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in all of this right now? It really acts like a tax on the economy. There's just no question
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about it. We had escalating uncertainty last year and we're seeing it again this year. What's
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important about it is it's much like a broken stoplight at a busy, busy intersection. When you see
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a busy, a broken stoplight, everybody slows down, traffic backs up. Some people opt out and wait
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for the traffic light to fight to be fixed or traffic to clear before they pass through the
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intersection. That's the same kind of response you get from employers in periods of heightened
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uncertainty. They cut back on investment decisions most notably on hiring. So if we zoom out just
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a little bit here, Diane, outside of the two most recent recessions last year saw the lowest pace
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of average job growth since 2003. January, we saw unexpectedly high numbers. Now we have unexpectedly
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low numbers. What does this mean about long-term trends? We're still seeing a very, very slow sort of
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slushy labor market. It's a low higher, low fire labor market. That is not a good place to be.
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It's a labor market where it's very hard for those people who've not gotten a job yet new college
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grads or new high school grads that are just entering the labor market to get their foot in the
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door when firms are not hiring at a healthy pace. There's not a usual churn in the labor market
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that we've seen. And in fact, the ability to hop jobs and get a premium has almost evaporated now.
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So in a low fire, low higher economy, what does that mean for how the average American is experiencing
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this economy right now? Well, it really has been what we've been in for the last year now,
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and that is not good. What we've seen is both concerns about inflation and job security
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intensify, even as the economy continued to grow. We had almost a jobless boom in 2025,
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and that is not it's showing up in the dissonance that people say how they feel about the economy
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because they're dealing with this sort of tension of both higher unemployment and higher inflation.
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An inflation is much like stock returns, stock returns compound over time and make people wealthy
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on the other side of that. Inflation has been high and too high for five years. It's compounded
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and put the level of prices out of reach for far too many. In about 30 seconds or so, I have left.
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We know the Federal Reserve is going to meet in another week and a half to discuss a possible
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rate cut. What do you think we'll see? They're not going to be able to cut rates at this
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meeting. There will be at least one descent, maybe two, but I think this is a very difficult
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situation for the Fed to navigate. It's not the 1970s, but we are five years in with inflation
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too high and that context matters. Diane Swank, Chief Economist at KPMG. Thank you so much for
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your time. All was good to speak with you. Thank you.