AffirmAFRM

U.S. employers announced about 33,000 job cuts in July, which is the lowest level in two years. This represents a 27 percent drop from June and is nearly half the number of layoffs seen in the same month last year.

This is good news for Affirm because its profits depend on the credit health of its users. When more people stay employed, they are more likely to make their monthly loan payments on time. Since Affirm takes on the risk of these loans, a stable job market helps keep its losses low and its lending business profitable.

Affirm will release its financial results for the final quarter of its fiscal year on August 27. Management will host a conference call that afternoon to discuss the company's performance. This update will be an important check on the growth of the Affirm Card. We are also looking for details on how well the company is managing loan losses as it continues to expand its lending volume.

Source: Business Wire

The number of people filing for unemployment benefits rose slightly last week, but a separate report showed that planned layoffs dropped to a two-year low in July. These numbers suggest the job market remains stable even as hiring slows down. A steady job market is important for a lender like Affirm. When people feel secure in their jobs, they are more likely to use buy-now-pay-later services for purchases and, more importantly, they are better able to pay back those loans on time. This data supports the idea that consumer credit health is holding up for now.

Source: Reuters

Minneapolis Fed President Neel Kashkari stated that the central bank should begin moving interest rates higher to continue its fight against inflation. This hawkish stance suggests that the era of steady or falling rates may be ending sooner than some investors hoped.

Higher interest rates are a direct challenge for Affirm because they increase the company's own borrowing costs to fund its loans. When it costs Affirm more to get the money it lends out, its profit margins can get squeezed unless it can pass those costs on to shoppers or merchants without hurting transaction volume.

Source: CNBC Television

Private sector job growth slowed more than expected last month, with only 44,000 jobs added compared to the 70,000 analysts anticipated. This follows a downward revision to June's figures, suggesting a cooling labor market.

For a lender like Affirm, employment is a critical indicator of credit health. When fewer people are finding work or job security weakens, the risk that borrowers will struggle to pay back their buy-now-pay-later loans increases. We are watching this closely, as Affirm's profitability relies on its ability to accurately predict and manage these loan defaults.