Expects seemingly stronger job growth (~135k) in January due to residual seasonality, but cautions not to interpret it as a labor demand rebound. There are still signs of a weakening labor market.

Challenger data leads actual layoffs by 4-5 months; hard data doesn't yet show layoffs picking up. It's surprising the Fed is encouraged by recent stability; job growth is flat on the year, and the unemployment rate had been rising for five months before December's dip. The Fed should consider cutting sooner as the unemployment rate is at the high end of their comfort zone.

AI is a cited reason but not the main one; economic conditions are bigger. The pullback in hiring, especially in professional services, started in early 2022, so it's not all AI. Small businesses saw hiring pullback first, likely due to restrictive rates.