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Hi, big news this evening: Nvidia could soon part ways with CEO Jensen Huang, the Wall Street Journal reported, over his affair with a suspected Chinese spy. Here’s a gift link to that developing story, and we’ll have more intrigue below. But first, let’s talk about jobs.

October was a surprisingly strong month for hiring, and tomorrow we’re set to get our first look at the November labor market with the weekly release of first-time jobless claims. Economists generally use unemployment insurance as a proxy for layoffs, but should they?  — Tony Wagner, newsletter editor
Attendees wait in line at a job fair.
Joe Raedle/Getty Images
Do low jobless claims tell an accurate story anymore?
First-time unemployment claims are at a 57-year low, but Marketplace’s Mitchell Hartman reports the job market isn't as good as that number suggests.
We got good news on hiring in October. The economy added 165,000 jobs and unemployment ticked down to a historically low 4.1%.

And we got, if anything, better news on first-time weekly jobless claims for the week ending Oct. 31, which fell to an even more historically low 189,000. Initial claims haven’t been this low since September 1969 . Keep in mind, back then, we only had about half as many workers who could even get laid off and go on unemployment.

Economic journalists often refer to initial jobless claims as a “proxy” for layoffs in the economy. That’s because when people lose their jobs through no fault of their own — which is the definition of a layoff — they can generally file a claim for unemployment insurance right away.

So, with jobless claims this low, we must be living in the absolute best of times layoff-wise, right? Not just a “low-hire-low-fire” labor market but a “low-hire, historically-low-fire” labor one?

Well, maybe not so fast. There are reasons to think jobless claims data may no longer be as reliable as it used to be — as a proxy for layoffs or (when they start rising) a harbinger of higher unemployment to come.

One reason economists tend to like jobless claims as an economic indicator is that the weekly report from the Labor Department comes directly from administrative records generated by state UI systems. It’s based on an actual count of unemployment insurance applications submitted by laid-off workers in every state, reported less than a week after they’re filed.

Compare that to the main BLS labor-market measures published in the monthly jobs report — like job creation and the unemployment rate — which are statistical estimates based on surveys of businesses and households.

Still, several leading labor market economists surveyed by this reporter said the current super-low level of jobless claims is as likely to reflect changes in the workforce and in the unemployment insurance system itself as it is to reflect a low level of layoffs in the economy right now.

“I don’t think it’s a reliable economic indicator anymore,” said Michele Evermore, a director at the National Employment Law Project and expert on social insurance, who worked on UI reforms in the Biden Labor Department. “I think it’s an indictment on the unemployment insurance system in the United States.”
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News you should know
Let’s do the numbers
  • What, me worry? Artificial intelligence stocks rebounded after last week’s sell-off to lift Wall Street today. The S&P 500 closed up 1.3%, the Dow added 0.5% and the tech-heavy Nasdaq rallied 1.6%.

  • Nvidia shares fell after hours on reports CEO Jensen Huang had a second affair with an executive who reported to him, and that the company’s board was preparing to oust him.
Tech
  • Semafor analyzed dozens of interviews Huang gave over the last few years to track his shifting stance on China and how it corresponds to his affair with data center executive and alleged Chinese spy Alice Huang.

  • Huang is the AI boom’s primary booster. Revisit our story from Monday about the promise and peril of a powerful celebrity CEO.

  • The big question, as ever, is what President Donald Trump (and his cabinet) knew about this alleged honeypot operation at Nvidia — and when they knew it.

  • You won’t be able to lurk on Reddit anymore, thanks to AI.
Government
  • Ahead of next month’s meeting to set interest rates, Chicago Fed President Austan Goolsbee called the latest inflation numbers “borderline disturbing.”

  • The U.S. government received $12 billion of Venezuelan oil revenue between its capture of president Nicolás Maduro and the end of September, according to a secret report. Most of the money went back into the country.

  • Affordability issues pushed Americans to vote overwhelmingly for Democrats last week. What can Congress actually do about inflation and interest rates?
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Mara Wilson's photo credit: Elizabeth Weinberg
QUOTE OF THE DAY
“I don’t think you can be world famous and remain unscathed.”
— Former child star Mara Wilson
Wilson would know; she rose to fame as the star of “Matilta,” “Mrs. Doubtfire” and “Miracle on 34th Street,” all before she was 10 years old. 

On this week’s episode of “This Is Uncomfortable,” we’re looking at the state of child stardom with Wilson and journalist Kate Taylor, who wrote an exposé on Nickelodeon's Dan Schneider and produced “Quiet on Set: The Dark Side of Kids TV.”
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Final note
Where there’s a crisis, there’s profit potential
And the climate crisis is no different.

This season, Marketplace’s podcast “How We Survive” is exploring the disaster economy. From prediction markets where investors can bet on the weather or hedge against climate risk, to insurance companies and cleanup companies raking in dough, we’re finding out who benefits from extreme weather, and what it means for the rest of us. New episodes start next week.
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