The economy and markets can feel dizzying and ever changing. That’s where we can help. Fisher Investments’ “This Week in Review” is a weekly segment designed to highlight a few things you may have missed this week, what they could mean for financial markets and why they matter to investors like you.
This week, we’ll be covering:
The latest US jobs data
ECB and BOE policy decisions
US Inflation
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Ben Thistlethwaite:
Hello and welcome to This Week in Review. This weekly segment is designed to highlight a few important developments you might have missed this week, what they mean for markets, and most importantly, the potential impact for investors.
To stay up to date with all of our latest market insights, subscribe to our YouTube channel or visit FisherInvestments.com. Now, let’s review what happened this week.
First, a look at the latest US jobs figures.
Earlier this week, the Bureau of Labor Statistics released its latest US jobs data, which gave us somewhat of a mixed picture. Non-farm payrolls fell by 105,000 jobs in October, but in November they grew by 64,000—ahead of expectations. Even with this recent rebound in job growth, headline unemployment ticked up slightly from 4.4% in September to 4.6% in November. In that same two-month span, the U-6 unemployment rate, which is the broadest measure of labor and includes those working part time for economic reasons and those just marginally attached to the labor force, that measure jumped from 8% to 8.7% in the same two-month span.
As we wrote in a recent MarketMinder article, this slight uptick in unemployment figures shouldn’t really be read as a warning sign for the broader economy. When you look at the underlying inputs, the main unemployment rate rose mostly because the number of individuals entering the workforce actually grew more than the number of those employed. Meaning more people were out there seeking work. The number of people working part time for economic reasons also rose.
So, all in all, it’s a bit of a mixed picture, but we don’t think long-term investors should worry about what this data means for the forward-looking direction of stocks, or the broader economy. Jobs data is notoriously volatile, and it tends to be backward looking, lagging behind what’s actually happening. And that’s especially the case right now, considering the delays in this data tied to the recent government shutdown.
Now, with payroll data alternating between gains and losses for months, this report likely comes as little to no surprise to markets. To us, it’s also likely recent layoffs are a delayed effect of earlier federal downsizing and economic uncertainty. For example, October’s government payroll data showed a large decline in federal employment tied to deferred resignations. This is an old story for markets. Also, importantly, weaker jobs data hasn’t led to a spike in unemployment claims, signaling that many job seekers actually remain pretty optimistic about finding new opportunities.
Historically, jobless claims are one of the first labor market indicators to rise during a recession, and we just haven’t seen that yet. So, for long-term investors, while jobs data may provide some context, it’s ultimately a backward-looking indicator, reflecting decisions that were made months ago. Now, markets, on the other hand, are forward looking pricing in expectations well into the future. So rather than focusing on short-term fluctuations in employment figures, it’s much more important to maintain a steady, disciplined approach to investing. Economic data will always have its ups and downs, but staying focused on your long-term goals and strategy is what helps drive real success over time.
Next, central bank rate decisions.
This week, the European Central Bank and the Bank of England announced their latest monetary policy decisions. As expected, the European Central Bank left its policy rate unchanged. Even with some persistent trade or political uncertainties, the eurozone economy continued to expand at a moderate pace, with inflation remaining relatively under control.
In November, eurozone inflation remained unchanged at 2.1%. Positively, this is both slightly below expectations and near the central bank’s inflation target.
Meanwhile, in a split decision, the Bank of England cut its policy rate to 3.75%, as UK inflation eased to 3.2% in November—falling from 3.8% back in September. UK inflation has run hotter than the US or Europe. The main drivers have been fairly concentrated, though, in a few essential categories—things like home energy, water and food.
Now, while this is definitely challenging for households, and we certainly sympathize with those struggling to meet rising costs for everyday necessities, this doesn’t reflect wider, more systemic inflationary pressures, and it doesn’t mean prices are broadly going to start running away again. Inflation in other categories things like healthcare, household goods including clothing and furniture, and some key service categories has been very tame, indicating that the UK’s inflationary pressures are really not as widespread as feared.
Looking forward, we think the stage is set for modest UK and global growth to positively surprise—particularly beneficial for non-US stocks. While many see rate cuts as vital for the economy and the stock market generally, monetary policy is really just one of many factors that influences markets. European stocks continue benefiting from several tailwinds, including things like an improving lending environment, resilient economic data, rising corporate earnings and the ongoing easing of some overblown tariff fears.
Finally, US inflation.
This week, the Bureau of Labor Statistics also reported that year-over-year headline inflation decelerated to 2.7% in the US, well below expectations. Now, some still worry this figure is too high. We understand that rising everyday expenses can be very stressful for many families and households. It’s something that really everyone feels at the grocery store or gas pump. But some inflation is a natural byproduct of economic growth and an expanding money supply. Persistently high inflation fundamentally stems from too much money chasing too few goods and services, and current global money supply trends really point to muted inflation ahead.
Despite lingering fears, there’s little evidence that tariffs are reigniting the inflation levels we saw in years like 2021 or 2022. And as we’ve said throughout this year, tariffs really have little impact on the money supply and are therefore really unlikely to significantly drive up inflation. It’s also worth noting that the extremely low inflation of the 2010s was a historical outlier. Today’s inflation is hovering near its long-term average of around 3%, and remains well below the 50-year annual average.
As for how this report might influence the Federal Reserve’s 2026 decisions, we believe that long-term investors actually don’t need to predict monetary policy. Whether the Fed cuts rates or not, such moves are rarely make-or-break for markets.
That’s it for this week.
Thanks again for tuning in to This Week in Review. If you’re looking for more insights, then don’t miss our other series, 3 Things You Need to Know This Week, that’s released every Monday. You can also visit FisherInvestments.com anytime for our latest thoughts on markets.
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