Marketplace Morning Report

Episode: When the job market is a "complicated, unusual, difficult situation"
Date: December 11, 2025
Host: Sabri Ben-Asher (in for David Brancaccio)
Length: ~10 min

Episode Overview

This episode explores the recent Federal Reserve decision to cut interest rates, focusing on surprising weaknesses in the U.S. labor market. Additional topics include the nuanced impact of tariff-driven inflation and a report from the BBC on the evolution of drone warfare in Ukraine. Through expert interviews and on-the-ground stories, the episode provides listeners a concise, insightful snapshot of economic and geopolitical developments relevant to both the U.S. and global business landscapes.

Key Discussion Points & Insights

1. The Surprising Weakness in the Labor Market

• After the Fed's Rate Cut: (00:55)
  • The Federal Reserve decided to cut interest rates, citing concerns that the U.S. labor market may be significantly weaker than previously thought.
  • Federal Reserve officials are becoming aware that the Bureau of Labor Statistics (BLS) may be overestimating job creation.
• Powell’s Assessment: (01:20)
  • Fed Chair Jerome Powell described the challenge as, "a complicated, unusual, difficult situation."
  • The BLS may be overcounting jobs by about 60,000 a month; the real number could be negative, possibly a loss of 20,000 jobs monthly.
  • Quote: “It’s very difficult to estimate job growth in real time. They don’t count everybody … there’s been something of a systematic overcount.” (Powell paraphrased, 01:42)
  • Periodic corrections are made to job reports, but real-time numbers can mislead policymakers and the public.
• Implications for Workers: (02:03)
  • Even as job creation may turn negative, the supply of workers has also declined, meaning the unemployment rate “hasn’t moved that much,” possibly masking underlying weakness.
  • Upcoming jobs data may be incomplete due to delays and the government shutdown, making it harder to get an accurate picture.

2. Tariff Inflation—One-Time Bump, or More?

• Powell’s Message on Tariffs: (02:27)
  • Powell suggests tariffs typically cause a “one-time bump” in inflation but recognizes the situation may be more complex.
• Diane Swonk’s Expert Commentary: (02:48)
  • Chief Economist at KPMG, Diane Swonk, explains that while tariffs are supposed to be “one-time,” the pandemic and staggered tariffs mean inflation persists.
  • Quote: “But that assumes that the tariffs occur all at once. Of course, they’ve been moved out in waves... that is at the heart of the debate at the Fed.” (02:48)
  • Debate within the Fed: Some believe inflation from tariffs should soon abate, while others worry it could become entrenched.
• Spread of Tariff Impacts: (03:46)
  • Swonk describes “opportunistic pricing,” where companies in non-tariffed areas raise prices because competitors do.
    • Example: During the U.S.-China trade dispute, washers were tariffed and dryers were not, but both increased in price the same amount.
  • Tariffs now affect not just goods but services, because critical inputs like medical equipment face tariffs.
  • Quote: “There is contagion from tariffs … tariffs actually feed into service sector prices.” (04:17)

3. Drone Warfare and Industry Transformation in Ukraine

• BBC Report by Gideon Long: (06:12)
  • The war in Ukraine has led to an explosion in drone usage—by both professional manufacturers and homegrown operations.
• Expert Insight from Stacey Pettijohn: (07:10)
  • "This has been the first full-blown drone war in Ukraine. You found that there are a million small startups … mom and pop shops … donating [drones] to the forces in addition to established industries."
• Profile—Ksenia Kalmus, Drone Maker: (07:30)
  • Former floral artist, now head of “Clin Drones,” describing her shift:
    • “It was just [an] obvious decision for me. I just wanted to help my country, help my people and military. I helped them with different stuff. And at that moment I realized that all the requests were for drones.” (07:43)
  • Sourcing locally: “We are focused on Ukrainian components mostly. We don’t want to give money to China, so we buy components in Ukraine.” (08:07)
• Commercial Impacts and The Future: (08:17)
  • Massive growth in the drone industry: U.S., Portuguese, and German firms have seen valuation and share prices skyrocket.
  • Stacey Pettijohn on drone technology’s future:
    • “I do think there are going to be further changes in the future as autonomy advances. That’s going to be the next real shift.” (08:56)
• On-the-ground Reality: (09:04)
  • Ksenia Kalmus remains committed: “I will continue to assemble small, cheap drones for use on the front line.” (09:04)

Notable Quotes & Memorable Moments

• Jerome Powell (paraphrased):
  "It’s very difficult to estimate job growth in real time. They don’t count everybody. There’s been something of a systematic overcount." (01:42)
• Diane Swonk (KPMG):
  "That assumes that tariffs occur all at once … They’ve been moved out in waves … and that’s at the heart of the debate at the Fed." (02:48)
  "There is contagion from tariffs as well. We also know that tariffs … feed into service sector prices." (04:17)
• Stacey Pettijohn (Defense Expert):
  "This has been the first full-blown drone war in Ukraine. You found that there are a million small startups … mom and pop shops … donating them to the forces in addition to established industries." (07:10)
• Ksenia Kalmus (Drone Maker):
  "It was just [an] obvious decision for me. I just wanted to help my country, help my people and military... all the requests were for drones." (07:43)
  "We are focused on Ukrainian components mostly. We don’t want to give money to China, so we buy components in Ukraine." (08:07)
• Looking Ahead for Drones:
  "There are going to be further changes in the future as autonomy advances. That’s going to be the next real shift." (08:56)

Timestamps for Important Segments

• 00:55 – The labor market is weaker than reported; Fed concerned
• 01:20–02:27 – Powell’s comments, impact of inaccurate job counts, upcoming jobs report
• 02:27–04:23 – Tariff inflation: persistent or passing?
  • Includes Swonk’s explanation of how tariffs ripple through the economy
• 06:12–09:13 – Ukraine drone warfare report; industry’s evolution and frontline innovators

Summary

In under 10 minutes, this episode delivers critical perspectives on the U.S. jobs market’s hidden weaknesses, the ongoing debate over the inflationary impacts of tariffs, and the mushrooming drone sector in war-torn Ukraine. Through expert voices and frontline stories, listeners gain a grounded understanding of how big-picture economic shifts and geopolitical conflicts are reshaping markets and everyday lives.