Increased Layoff Warnings Could Affect Fed Rate Cut and Your Finances
- Author: Miguel Waters
- Posted: 2025-11-20
As the holiday season approaches, there is a worrying sign in the U.S. economy: tens of thousands of Americans have been told they may lose their jobs within the next two months.
These early warnings, called WARN notices, are official notifications that companies must give to employees when they expect big layoffs or plant closures. By law, employees must be informed 60 days in advance.
Why This Matters
When more workers are warned about layoffs, it often signals a weakening job market. This can influence many things that affect everyday life, such as:
- Mortgage and loan interest rates
- Credit card interest costs
- How much people are able to spend during the holidays
- Decisions by the Federal Reserve (the Fed), especially about whether to cut interest rates
Just a month ago, experts thought there was a 94% chance the Fed would cut rates in December. Now, that chance has dropped to about 51%.
This big change happened not because of bad data, but because the situation is uncertain and the job market is showing signs of trouble at a time when the Fed was hoping for clarity.
Recent Data
According to the Federal Reserve Bank of Cleveland, more than 39,000 workers in 21 states received WARN notices in October. This could show up in official job figures soon, possibly starting in late December or January.
When companies send out these notices, it usually means:
- Families have to spend less
- People are less likely to get raises
- Households may cut back on holiday shopping
This comes at a tough time. Americans are already dealing with:
- Record-high credit card debt
- Low savings rates
- Ongoing (though less intense) inflation, especially for essentials like rent and food
The Fed’s Uncertainty
Federal Reserve Chair Jay Powell recently said a December rate cut is “far from certain.” Other Fed leaders have stressed the need for caution, especially since the job market could be getting weaker.
The Fed has already cut rates several times over the past two years, and now they're waiting for more information before making another move.
Key economic data over the next month will help the Fed decide, including:
- New private-sector job reports
- Important surveys on business and employment activity
- More WARN notices for November and December
If actual layoffs begin to rise, the Fed may see this as a sign that the economy is slowing down, which is often a warning of a possible recession. If hiring stays steady, the Fed may wait to cut rates.
How Does This Affect You?
A softer job market can impact Americans in several direct ways:
- Job Security: If layoffs increase into early 2026, some employers may freeze hiring or slow promotions, especially in sectors like tech, retail, and manufacturing.
- Borrowing Costs: If the Fed cuts rates in December, mortgage, auto loan, and credit card rates could go down a bit. If not, borrowing will stay costly into early 2026.
- Holiday Spending: Economic uncertainty often makes people spend less during the holidays, which also affects businesses and possible future hiring.
- Investments: Financial markets may react strongly to news about the economy. If layoffs rise, the markets may drop, but positive news could cause a rebound.
What Should You Do?
- Keep an eye on job market trends.
- Be cautious about taking on new debt until rate decisions are clearer.
- Expect markets to keep changing as new data comes out before the Fed's December 10 meeting.
The U.S. economy is at a delicate point. If layoff warnings turn into real job cuts, the Fed might go ahead with a rate cut to help lower borrowing costs. But if uncertainty continues, rate cuts could be delayed.
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Check out: How Veterans Can Get VA Unemployment Benefits if They Can’t Work
