More chaos. Yawn.

And down she goes.

The latest jobs report out of the dumpster fire formerly called America confirms it. US private companies were expected to add 55,000 workers in September, but instead they shed 32,000. “A serious pullback,” said the aggregator. “Oh sh*t,” said Mr. Market.

Bond yields went up. Stocks went down.

The odds of another interest rate cut by the Fed on October 29th stand at 99%. Investors are also betting 89% that a further chop will occur on December 10th. And it won’t stop there.

What does this mean?

The American labour market is icing. Look at the non-farm payroll surveys – the gold standard of data. The summer months were a disaster. August was disappointing. And now we won’t even get a September report, since the federal government shut down last night. This also means hundreds of thousands of workers in Washington and across the nation stopped collecting paycheques and are technically unemployed.

“Despite the strong economic growth we saw in the second quarter, this month’s release further validates what we’ve been seeing in the labor market, that US employers have been cautious with hiring,” said ADP, the folks which do the private-hire survey. The company also revised its last monthly report downward.

This matters more than usual because, as mentioned, Washington is dark and there’ll be no regular Bureau of Labour Statistics data published this Friday. And it’s even more consequential after Trump fired the BLS director when the summer numbers sucked. That was epic stupid.

Whatever the orange guy hopes for, the evidence points to the fact his economic policies are not working. Inflation has not been conquered. The unemployment rate, although low, is rising. It’s at a four-year high. Job creation has slowed dramatically. For the first time in five years, jobs were shed in June. There are fewer workers quitting their jobs. And fewer employers are hiring.

No wonder. Every week Trump changes something – today it was a spate of new tariffs on kitchen cabinets, softwood lumber, bathroom vanities, heavy trucks, upholstered furniture and branded drugs. Everything now flows from his desk in the form of an executive order, bypassing Congress, debate, negotiation, legislation and regulation.

And now with a shutdown in effect, Trump becomes more omnipotent. “We may use this to get rid of a few things,” he said, as the event loomed.

The last time Washington ceased to function, by the way, was during the first Trump presidency, when it was shuttered for 35 days. Many believe this time it could be deeper, longer, darker and leave permanent changes behind. Millions of Americans will be impacted and the country will look more dysfunctional, especially after Tuesday’s assertion by Trump (to all the military generals and admirals) that American cities will be ‘training fields’ for the nation’s combat troops.

Well, what’s the play now?

First, be very glad you live here.

Second, the capricious, unpredictable, volatile, untrustworthy nature of American trade, fiscal and foreign policy could bite the US economy in coming months and, by extension, the equity market. No crash. But expect some swooning.

Third, we’re on the path to lower interest rates, taking us to a bottom sometime in the second half of next year. It won’t be Covid again, but maybe close if Trump actually controls the Fed (which looks more and ore likely). Cheap money will help mitigate the stock market’s deep worries about tariffs, make America’s massive debt a little easier to finance and lower the US$ – which will boost the loonie, commodity values and (maybe) Bay Street.

Finally, this is why a balanced, diversified and global approach to investing works. Spread the risk. Don’t try to outguess reality. Never abandon an asset class. Never gamble. Never sell into a storm. Never watch BNN, take investment advice from some sketchy online dog-loving dude, or think you know what Trump will do next.

This has only begun.

About the picture: “As a long time reader and client I am answering your siren call,” writes Dianna, in Ontario. “Please stop with the cats. The Mr. is enjoying a summers day on Lake Simcoe. He’s a 4 yr old Havanese who likes long walks, paddle boarding and belly rubs. Other dogs not preferred. Keep up the fine and witty work.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/10/01/more-chaos-yawn/