Judging the job market with delayed data is a bit like trying to cook the Christmas turkey blindfolded—hard to tell if it’s undercooked, overdone, or just right. But Wall Street should be happy enough with the latest employment numbers, even if it’s not such good news for many workers.
A bumper crop of data from October and November was always likely to be confusing. The headline figure on Tuesday was a rise in unemployment to a four-year high of 4.6%. That might set off alarm bells about a
collapsing labor market, except for the fact it was driven by people re-entering the workforce. It’s tough to find a holiday job this year but that’s not a harbinger of recession.
Still, the numbers were weak enough that the case for the Federal Reserve to keep cutting interest rates is intact. While there’s Thursday’s inflation report to watch out for, concerns about rising prices should be muted with oil prices hovering near four-year lows and the tariff shock seemingly passed. The market expects the Fed to pause in January, but that doesn’t mean the easing cycle is over, with a rate cut in March looking likely. That should soothe concerns about a bursting artificial-intelligence bubble—lower rates lead to more liquidity and cheaper debt funding, which supports the valuations of technology companies.
Things might get more complicated in the spring, as the focus switches to a new Fed chair—likely to be named early next year—and political pressure on the central bank to reduce rates from President Donald Trump.
Atlanta Federal Reserve President Raphael Bostic is already warning about a loss of the Fed’s credibility, although he is in the minority calling for an immediate halt to rate cuts.
With the last jobs data for
the year out the way, investors should be free to tuck into Christmas dinner without too many misgivings—but, as always, beware of overindulgence that might lead to indigestion in the new year.
—Adam Clark
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Fed Should Pause Rate Cuts or Risk Credibility, Bostic Says
Atlanta Fed President Raphael Bostic says the central bank should pause additional interest-rate cuts. Inflation is still too high, he says, and lowering rates too much could weaken the Fed’s credibility by further fueling inflation. He didn’t support December’s rate cut.
- In an essay, Bostic said additional cuts risk “exacerbating already elevated inflation.” Policymakers have been debating whether inflation has largely been defeated or remains a persistent risk. Fresh data on Tuesday show modest job growth in November despite an uptick in the unemployment rate to 4.6%.
- Bostic called the jobs report mixed and said it didn’t change his outlook. Job gains of 64,000 were stronger than many expected, he said. It is unclear whether recent labor market shifts reflect a cyclical slowdown that Fed policy can address or structural forces that it can’t.
- Inflation presents a clearer risk, Bostic said. It has exceeded the Fed’s 2% target for nearly five years, during which time overall prices have risen by about 20%. Bostic expects inflation to remain above 2.5% even at the end of 2026. Inflation won’t likely return to target until 2028.
- A major driver of that view, he said, is evidence from the Atlanta Fed’s business surveys. Companies expect higher input costs and say they plan to continue raising prices well into 2026 to protect profit margins. Those pressures, Bostic said, aren’t limited to firms directly affected by tariffs.
What’s Next: There’s growing disagreement within the Fed over the inflation outlook. Fed governor Stephen Miran, an economic advisor to President Donald Trump has said that inflation may be closer to 2% than headline figures suggest, pointing to lagging housing and other data that distort the overall inflation picture.
—Nicole Goodkind
Warner Bros. Discovery Will Tell Shareholders to Reject Paramount Bid: Report
Get ready for more drama from Hollywood’s biggest takeover battle.
Warner Bros. Discovery’s board is preparing to tell its shareholders to reject Paramount Skydance’s offer, according to a report.
- Warner could tell investors to turn down Paramount’s bid as soon as Wednesday, people familiar with the matter told The Wall Street Journal. Warner plans to recommend they back an existing deal with Netflix instead.
- Netflix agreed earlier this month to buy the Warner streaming and studios businesses at $27.75 a share, with cable being spun out to investors. Paramount responded by going straight to shareholders with a hostile offer to buy all of Warner Bros. Discovery for $30 a share.
- Warner stock had been trading at close to $30 before Tuesday, suggesting investors were expecting Paramount to make a higher bid. It dropped on Tuesday, closing 2.7% lower at $28.90.
- Some shareholders have been worrying about how Paramount would fund the takeover deal. Jared Kushner’s private-equity firm Affinity Partners had been an equity investor in Paramount’s offer, but it said in a statement on Tuesday that it was no longer involved, per The Journal. Affinity, Netflix, Paramount, and Warner didn’t immediately respond to requests for comment from Barron’s
What’s Next: Paramount’s tender offer is set to expire on Jan. 8, so it will have until then to make a decision on whether to improve its bid. The key decision for Warner shareholders is what they think the company’s cable networks are worth, considering those will be spun out if the Netflix-Warner deal goes through.
—George Glover
Medline Set to Trade After Pricing Largest IPO in 4 Years
Medline, which supplies hospitals with medical and surgical products, priced its
initial public offering near the top of the expected range, in what is the biggest new listing in four years. It’s giving hopes for the health of the IPO market, which was interrupted by tariffs and the government shutdown this year.
- It will begin trading today on the Nasdaq after offering 179 million shares, about 14% of its class A common stock, at $29 each. The IPO raised $6 billion and gives the company a market value of about $54.5 billion. There have been some 200 IPOs this year, according to Renaissance Capital.
- Only three U.S. IPOs have reached $5 billion in the past five years, according to Dow Jones Market Data. It’s the largest since
