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US jobs report: UBS’s Paul Donovan says labor data could ensure insurance Fed cut

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Employment data released this week showing underlying weakness in America’s jobs market may be the foundation for new interest rate cuts from the Fed early next year, according to UBS.

The release from the U.S. Bureau of Labor Statistics yesterday, delayed due to the government shutdown, showed nonfarm payroll employment added just 64,000 jobs in November, relatively unchanged from April. Meanwhile, the unemployment rate continued its steady climb higher in the latter part of this year, and now sits at 4.6%.

The data painted a strained picture as we round out the year. For example, the number of people employed part-time involuntarily was 5.5 million in November, an increase of 909,000 on the month prior. These individuals, the Bureau of Labor Statistics (BLS) explained, would have preferred full-time employment but are working part-time because their hours were reduced or they were unable to find full-time jobs.

Elsewhere, the unemployment rate among teenagers was up month-on-month to 16.3%, while the number of people jobless for less than five weeks was 2.5 million in November, up by 316,000 from September. This suggests that labor market entrants and those bouncing from job to job are having a tough time landing more sustainable roles.

Likewise, although a full employment release wasn’t shared for October, this week’s data included the fact that Federal government employment declined by 162,000 in October.

As such, the data “raised several red flags” said UBS’s Paul Donovan in a note to clients this morning. He added that the quality of the data itself must be taken with a pinch of salt, because the government shutdown compounded the issue of lower response rates to BLS surveys.

But “the report does not raise too many concerns about the resilience of the U.S. consumer,” he added. “Employment in restaurants continues to grow, suggesting the trend to spending on having fun continues.”

“However, there are probably enough concerns about the health of the labor market to justify an insurance rate cut by the Federal Reserve next year.”

Currently, investors aren’t expecting that cut to come anytime soon. The next meeting at the end of January is unlikely to yield a further reduction to the base rate, according to CME’s FedWatch barometer. At the time of writing, the odds of a 25bps cut sit at 22%, though past meetings have seen odds shift dramatically as the meeting approaches.

The October figure was especially “jarring” chimed Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management. In a note shared with Fortune, Ausenbaugh echoed Donovan: “This report bolsters the way we have been thinking about the Fed’s current policy approach. 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.”

Cautious optimism

Despite the data providing a jump-scare or two, Macquarie’s David Doyle sees some green shoots.

“While data are mixed, overall they support the notion of a likely bottom in hiring in the summer months with potential improvement lying ahead in 2026,” he wrote in a note to clients. Government employment was a drag on the figures overall, he argued, meaning that this should reverse itself in December data after the shutdown had ended.

Not everyone is so optimistic. ADP chief economist Nela Richardson told Fortune in an exclusive interview that she was not yet seeing a “rosy picture” in private payroll data. Per ADP’s most recent results, U.S. private employment dropped by 32,000 roles in November, led by weakness from smaller businesses. Companies with between one and 19 employees axed 46,000 roles, while those with 20 to 49 employees cut 74,000. Conversely, companies with 500-plus staff added 39,000 employees.

She explained: “Tiny firms are a big chunk of employment, but the tiny firms are making tiny moves, and they’re moving all in the same direction. It could be as small as not hiring two teenagers at the bakery or forgoing that delivery driver over a certain season, it doesn’t mean it’s a big, huge layoff, it’s not replacing a worker here or there, and those changes add up.”



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Natasha Lyonne says AI has an ethics problem because right now it’s ‘super kosher copacetic to rob freely under the auspices of acceleration’

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Actor Natasha Lyonne may not come from the tech world, but her production company is emerging as a trailblazer in bringing AI content to the big screen—and she has thoughts about the tech’s increasing influence.

Lyonne, who is most well-known for an on-screen roles in Netflix’s “Russian Doll” and “Orange is the New Black,” is also a writer, director, and the cofounder of Asteria Film Co., an artist-led animation and film studio that aims to provide high-quality and copyright friendly generative AI for marquee content.

Other AI video-generation models like OpenAI’s Sora 2 and Google’s Veo 3 have run into controversy for scraping the web and sometimes clashing with copyright rules. Asteria, which Lyonne co-founded in 2022, is taking a different approach.

Asteria partnered with Moonvalley AI, which makes AI tools for filmmakers, to create Marey, named after cinematographer Étienne-Jules Marey. The tool helps generate AI video that can be used for movies and TV, but only draws on open-license content or material it has explicit permission to use. 

Being careful about the inputs for Asteria’s AI video generation is important, Lyonne said at the Fortune Brainstorm AI conference in San Francisco last week. As AI use increases, both tech and Hollywood need to respect the work of the cast, as well as the crew and the writers behind the scenes. 

“I don’t think it’s super kosher copacetic to just kind of rob freely under the auspices of acceleration or China,” she said. 

While she hasn’t yet used AI to help make a TV show or movie, Lyonne said Asteria has used it in other small ways to develop renderings and other details.

“It’s a pretty revolutionary act that we actually do have that model and that’s you know the basis for everything that we work on,” said Lyonne.

Marey is available to the public for a credits-based subscription starting at $14.99 per month.

While her production company aims to lead the AI charge in Hollywood, Lyonne said it’s important to remember the human aspect of tech. With so many countless possibilities for AI’s uses, she noted it can at least be used to make human lives better, and not purely for “cutting costs.”

“We need human beings in AI so that the tools don’t run us,” she said.



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James Talarico says biggest ‘welfare queens’ are corporate giants ‘that don’t pay a penny’ in taxes

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James Talarico, a 30-year-old former public school teacher and current Texas State Representative, is mounting a 2026 U.S. Senate campaign that challenges conventional wisdom about government spending and corporate responsibility. He represents a growing push to scrutinize corporate tax strategies and reframe the debate around who truly benefits from government support. His arguments about tax avoidance by Fortune 500 companies and wealthy executives are gaining traction among young voters and may influence future tax policy discussions if he gains higher office.

​​During a recent taping of Jubilee Media’s web series Surrounded at the company’s Los Angeles studios, Talarico sat down with roughly 20 undecided Texas voters to debate his policy positions. The episode, which released on Monday, caught fire on social media after Talarico delivered a pointed reframing of conservative rhetoric about welfare spending. In a sharp challenge to long-standing political talking points about “welfare queens”—a term traditionally used to disparage low-income individuals receiving government benefits—Talarico flipped the script, arguing that the nation’s actual dependency on public resources flows upward, not downward.

“The biggest welfare queens in this country are the giant corporations that don’t pay a penny in federal taxes,” he said. He also extended his critique to include wealthy executives, adding “the biggest welfare queens are the CEOs who get a tax deduction for flying on a private jet.”

Corporate tax avoidance as hidden welfare

Talarico’s argument strikes at a real issue: Some of America’s largest corporations have legally structured their tax arrangements to minimize or eliminate federal income tax liability. This practice has drawn scrutiny from policymakers across the political spectrum and sparked ongoing debates about tax code reform.​ So, rather than accepting that welfare is primarily a lower-income issue, he argues the problem is systemic and benefits the wealthy.

Talarico said his background as a middle school language arts teacher at Rhodes Middle School in San Antonio informed many of his policy positions.

“I was a public school teacher, so I saw how when kids showed up hungry, they couldn’t learn,” he told local ABC affiliate KSAT in October. “Even my brightest students, even my hardest working students couldn’t succeed. Couldn’t pull themselves up by their bootstraps when they didn’t have boots.”

To illustrate the point, he invoked a metaphor about teaching someone to fish: “If you’re gonna take your friend out on a boat for the day to teach him how to fish, you wanna make sure he had breakfast that morning. You wanna make sure he’s not sick, because that allows him to learn how to fish again,” he said.

A platform around corporate accountability

Since his election to the Texas House in 2018 at age 28, Talarico has positioned himself as a champion of legislation targeting corporate and pharmaceutical industry practices. He was instrumental in passing legislation capping insulin copays at $25 per month in Texas and enabling the importation of lower-cost medications from Canada.

His Senate campaign messaging appears to hinge on this core idea: that fairness and personal responsibility should apply equally to billionaires and working people.

“We don’t want dependency. We want to reward hard work. And I think that should apply to those billionaires, not just working people,” he said during the recent taping.

​You can watch the entire Surrounded episode featuring James Talarico below:



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Gen Z is open to blue-collar work and companies need them — but both sides are missing each other

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Earlier this year, Ford CEO Jim Farley said that America needed a wake-up call. Five thousand mechanic jobs at Ford had gone unfilled. They all offered six-figure salaries—well above the average American worker’s wage—but people weren’t applying.

And Ford isn’t the only employer struggling with a shortfall of workers. For over a decade, numerous blue-collar professions—careers that include manual labor ranging from manufacturing and automotive technicians to construction—have struggled to attract young people.

The Bureau of Labor Statistics reports that more than 400,000 skilled trade jobs are currently unfilled, a gap expected to widen as demand for labor continues to grow. The Manufacturing Institute and Deloitte estimated that 3.8 million additional workers will be needed over the next decade. 

Myriam Sullivan, senior director at Jobs for the Future’s Center for Apprenticeship & Work-Based Learning, says the shortages stem from a “perfect storm,” in which an aging workforce collides with cultural stigma around the work and increased competition for specialized labor. 

However, there is some evidence that Gen Z is reconsidering the stigma around blue-collar work as a frankly brutal economy pushes them to reevaluate their options. About 78% of Americans have noticed a rising interest in trade jobs among young adults, according to a 2024 Harris Poll survey for Intuit Credit Karma. With rising tuition costs, these debt-burdened Gen Zers are interested in well-paying careers that allow them to skip a traditional four-year college education. Enrollment in vocation-focused community college has increased by 16% in this last year, according to the National Student Clearinghouse’s tracking data, which also found a 23% rise in Gen Z studying construction trades from 2022 to 2023.

But, as white-collar entry-level jobs disappear, employers and educators have failed to build credible pathways into blue-collar work—leaving high-paying roles unfilled and Gen Z shut out.

The Stigma Around Blue-Collar Work

Clinton Crawford, a 55-year-old automotive technician in Arkansas, told Fortune the system fails from the outset to support young people interested in work like his. Crawford’s high school–aged children were never presented with blue-collar work as a viable option. Instead, nearly every student was encouraged to prepare for a four-year college education. “That’s good, if that’s for you,” Crawford said, “but I don’t think it’s for everyone.”

A similar exchange took place within the household of Ford’s chief executive. At the Ford Pro Accelerate event organized by Farley this fall, with an emphasis on what Farley calls the “essential economy” and the many missing roles to fill there, he spoke with Labor Secretary Lori Chavez-DeRemer and Mike Rowe of the Mike Rowe Works Foundation. Farley told them about his son’s summertime work as a mechanic, and his plaintive statement to his parents afterward: “I don’t know why I need to go to college.” Farley said his son found those experiences under the hood of a car more worthwhile than what he believed college could offer him, and that should be welcomed. “It should be a debate.” A few months earlier, Farley told the Aspen Ideas Institute that some of his workers were taking Amazon shifts to make ends meet and he’d heard that “none of the young people want to work here.”

For Farley, the issue stems from a culture that doesn’t value blue-collar labor. A 2025 survey conducted by home services software maker Jobber found that only 7% of parents would prefer their children to pursue vocational education and related work, while a majority of Gen Z students said vocational education carries a cultural stigma compared with a college education.

“If you were to meet a doctor, or someone in a four-year program, or you were to meet someone who is in a four year program, or you met someone who was working on your car, think of the different impressions you would have of all three,” Crawford said.

The Pew Research Center found that only three in 10 blue-collar workers believe that most Americans have “a great deal” or “a fair amount” of respect for the work they do. And academics like Harvard professor Michael Sandel have also long raised concerns that the value blue-collar workers bring to the economy has not translated into how they are treated in society.

Crawford pushes back against stereotypes that frame blue-collar labor as unskilled, pointing to the intelligence required to understand the technical aspects of complex systems while translating that knowledge to customers. According to Crawford, these trades are not “for those who can’t do well.” To him, this work is deeply fulfilling, and he finds meaning in helping people get back on the road.

“I’ve been able to help someone when life has given them a bad situation.”

Limited Pathways Into Skilled Trades

Employers have struggled to build and sustain the pathways needed to meet increasing demand for skilled labor. In her role at Jobs for the Future (JFF), a national nonprofit focused on workforce development, Myriam Sullivan works with employers to build apprenticeship pipelines. She said, employers “expect people to come to work job-ready.”

“Oftentimes our conversations with employers center around, like, ‘you’re never going to find that,’” Sullivan said. “So how might we flip that and help you build the workforce that you want to see?”

JFF has found success by helping small and mid-sized firms subsidize training costs, encouraging companies to take a more active role in building the workforce they seek. The organization has also identified gaps in awareness among high school students about the pipelines available to young people interested in this work and collaborates with educators as an intermediary.

Some economists say the barriers to pursuing skilled trades remain primarily financial. Joe Mahon, director of regional outreach at the Minneapolis Fed, said he struggles with characterizations of Gen Z as lacking the work ethic or disposition to see training programs through—claims that he hears often from employers. Instead, Mahon said there is “a tremendous disconnect” between that rhetoric and what actually hinders young people from pursuing the trades.

In his conversations with workers, he said candidates may be offered as little as $11 an hour while training, prompting many to choose immediately higher-paying work instead. If workers are “being paid quite a bit less than what they’re hoping to eventually make, that can be a hard decision to make, especially if you’re cash-strapped,” Mahon said.

However, for those who can see past the stigma attached to blue-collar labor and overcome the financial hurdles, these jobs can offer a level of stability that is increasingly rare as AI disrupts the white-collar job market and reduces entry-level opportunities for young college-grads.

Kyle Knapp, a 38-year-old shop foreman in California, told Fortune that his work enabled him to earn “a great living.” He has bought a house and has been able to comfortably raise a family. The average age of a homebuyer is now 40 years old— it has become a milestone that Gen Z workers now view as nearly impossible. 

Educators and employers still face significant challenges in creating clearer pathways for young people to enter these critical and lucrative careers. But it’s an effort Crawford sees as necessary: “Everybody works in this economy together.”



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