When the job market is a "complicated, unusual, difficult situation"

Summary

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

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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.

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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)

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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)

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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

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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.

Transcript

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[Sabri Ben-Asher]

The labor market Might be a Lot Weaker than We Thought From Marketplace, I'm Sabri Bennish, in for David Brancaccio. The Federal Reserve decided to cut interest rates again at its meeting yesterday. One reason it decided to do that is because Fed officials think the labor market, which we already knew is cooling, is actually a lot weaker than it appears. Marketplace's Nancy Marshall Genser has that.

[Nancy Marshall Genser]

Fed Chair Jerome Powell says the Fed is facing, quote, a complicated, unusual, difficult situation because the Bureau of Labor Statistics could be overestimating the number of jobs being created by about 60,000amonth. Powell says the actual number could be negative, a loss of 20,000 jobs per month. The Fed chair says this kind of forecasting is tough.

[Marketplace Host/Announcer]

It's very difficult to estimate job growth in real time. They don't count everybody. They have a survey and there's been something of a systematic overcount. And so we expected and they correct it twice a year.

[Nancy Marshall Genser]

The BLS is going to change its modeling a bit that could make the numbers more accurate starting this February. But in the meantime, Powell says we're.

[Marketplace Host/Announcer]

In a situation where job creation may actually be negative. Now. Supply of workers has also gone way down, so the unemployment rate hasn't moved.

[Nancy Marshall Genser]

That much, which could be giving workers a false sense of security. The BLS is scheduled to release the November jobs numbers next week. Jobs data from this fall is late and in some cases incomplete because of the government shutdown. I'm Nancy Marshall Genser for Marketplace.

[Sabri Ben-Asher]

Something else Fed Chair Jerome Powell mentioned yesterday was tariff inflation. He said import taxes should be just a one time bump in inflation. Diane Swonk is chief economist at KPMG and joins us for more. Hey, Diane. Diane So if tariffs are a one time deal, are, are we past tariff inflation yet?

[Diane Swonk / Stacey Pettijohn / Ksenia Kalmus (various experts)]

Well, first of all, we're not past it, and he didn't say we are past it yet. But an important issue is that's at the heart of the debate at the Fed is tariffs are typically a one time bump in prices. And so that is historically what you would count on. But that assumes that the tariffs occur all at once. Of course, they've been moved out in waves and it also assumes they don't on the heels of a pandemic induced inflation that's persisted for nearly five years now. And so the debate at the Fed is some people saying, listen, this should be over soon, we'll get through it. And we can sort of look through it a bit and try to stimulate the labor market in the interim between those people who are worried that maybe this is a more entrenched bout of inflation that isn't as easily sort of resolving on itself. And that's the heart of this sort of very intense debate we see within the Fed.

[Sabri Ben-Asher]

You know, if tariff inflation is tariffs on particular goods that we import, how does that spread any further than that?

[Diane Swonk / Stacey Pettijohn / Ksenia Kalmus (various experts)]

Well, there's oftentimes what we call opportunistic pricing, and that is areas that are protected by tariffs. Even if they're not specifically feeling tariffs, they can raise their prices too. We saw that back in the trade war with China where, you know, the price of washers were tariffs, the price of dryers were not. Yet they both went up by the same amount because they tend to be sold together. And so we know that there is contagion from tariffs as well. We also know that tariffs actually feed into service sector prices. A lot of medical equipment and, you know, personal protection equipment that was so important during the pandemic, a lot of that is heavily tariffed at the moment.

[Sabri Ben-Asher]

Diane Swonk, chief economist at kpmg, thank you so much.

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[Sabri Ben-Asher]

Russia's war on Ukraine continues. Central to this fight is drone warfare and the industry that makes it possible. The BBC's Gideon Long filed this report.

[Marketplace Host/Announcer]

In a clearing in a forest in Ukraine, a soldier sends a drone high into the air. It's a small device, maybe 30cm across with rotor blades on each corner. A standard commercial drone. The kind of thing you might use to take aerial footage at your wedding or birthday party. But strap a bomb to it and it becomes a deadly weapon. The Russians and Ukrainians have used them to devastating effects. Before Russia's full scale invasion in 2022, there were just a handful of companies in Ukraine making drones. Now there are hundreds. Stacy Pettijohn is Director of the Defence Program at the center for a New American Security in Washington and the author of several reports on drone warfare.

[Diane Swonk / Stacey Pettijohn / Ksenia Kalmus (various experts)]

This has been the first full blown drone war in Ukraine. You found that there are a million small startups. There are a ton of mom and pop shops where people are making drones and assembling them in their apart in their garages and donating them to the forces in addition to establish industries.

[Marketplace Host/Announcer]

Ksenia Kalmus is one of those mom and pop drone producers. Before the war she was a floral artist with a flower shop in kyiv. But after 2022 she set up a company called Clin Drones.

[Diane Swonk / Stacey Pettijohn / Ksenia Kalmus (various experts)]

It was just 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.

[Marketplace Host/Announcer]

And where do you get the parts for the drones from? Do you have to buy them in the frames or are you producing them yourselves using 3D printers? Where do you get the parts?

[Diane Swonk / Stacey Pettijohn / Ksenia Kalmus (various experts)]

We are focused on Ukrainian components mostly. We don't want to give money to China, so we buy components In Ukraine.

[Marketplace Host/Announcer]

Ksenia's company relies on donations, but elsewhere, drones are big business. US company AeroVironment has seen its share price soar over 500% since the invasion of Ukraine. Portugal's Tekava is valued at over a billion dollars, and Germany's Stark is also expanding its operations. So what are the likely next developments in drone warfare? At the moment, many drones have to be guided to their targets by an operator, an actual human being with a remote control panel standing within rang of the drone and therefore often in danger. But Stacey Pettijohn at the Centre for a New American Security says that will evolve.

[Diane Swonk / Stacey Pettijohn / Ksenia Kalmus (various experts)]

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.

[Marketplace Host/Announcer]

In the meantime, back in Kyiv, former floral artist Ksenia Kalamus says she will continue to assemble small, cheap drones for use on the front line.

[Sabri Ben-Asher]

That's getting long. With the BBC in New York, I'm Sabri Ben Asure with the Marketplace Morning.

[Marketplace Host/Announcer]

Report.

[Sabri Ben-Asher]

From APM American Public Media.

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