Thoughtful Money with Adam Taggart Could The Weakening Jobs Market Actually Be GOOD For The Economy? | Michael Kantrowitz
Oct 2, 2025
In this engaging conversation, Michael Kantrowitz, Chief Investment Strategist at Piper Sandler, shares his insights on the economy using his HOPE framework. He argues that a weakening jobs market could lead to disinflation, lower interest rates, and robust economic recovery. Michael highlights how historical trends show that markets can rise even when unemployment increases. He also discusses the implications for housing, the potential risks of AI valuations, and the importance of an active investment approach during these shifting economic conditions.
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Historical Precedent For Today's Soft Jobs Pattern
- Michael notes the current softer employment and rate decline pattern isn't unprecedented if you look back 60 years.
- He frames it as a 'no pain, no gain' backstop peculiar to the post-2022 inflation era.
Define Recession Before Reacting
- Don't equate temporary fears of recession with an actual broad-based contraction; define 'recession' precisely.
- Use broad economic contraction measures rather than headlines to guide allocation decisions.
Require Earnings Before Backing Small Caps
- Don't buy small caps purely on the expectation of macro relief; demand a visible earnings recovery first.
- Prioritize stocks with improving earnings prospects rather than relying on PE re-expansion alone.