Although slowing job growth does not mean a recession, today’s jobs report shows that the strong job gains seen early in the COVID-19 recovery period are coming to an end. This is in line with my belief that the workforce will recover after the COVID-19 recovery period. COVID.
Although the headline numbers in today’s report were better than expected, we are entering a new phase of the economic cycle. That means you need to know where to look for clues about a recession. BLS employment data is not the best indicator of a recession, but everyone agrees this is because the 2023 recession that many expected did not occur.
Here are my three key takeaways regarding the labor market recovery since. We have abolished the recovery model from the new coronavirus infection. December 9, 2020:
1. Job information is as follows. Ten million. (This is how it ended up 12 million) It’s finally here. 8.8 million.
2. All jobs lost due to COVID-19 must be regained by September 2022. It was completed almost on schedule. here.
And the third one is the most important one at this stage of the cycle.
3. Without COVID-19, total U.S. employment would be between 157 million and 159 million today. We’re in that situation right now, and population growth is slowing, so there shouldn’t be any big labor reports coming out, but that’s perfectly normal.
Take a look at today’s employment report.
from BLS:Nonfarm payrolls increased by 216,000 in December, and the unemployment rate remained unchanged at 3.7%, the U.S. Bureau of Labor Statistics announced today. Employment continued to increase in government, health care, social assistance, and construction, but jobs were lost in transportation and warehousing.
Jobs created and lost in the last month include:
In this employment statistics, the unemployment rate by education level is as follows:
- Less than high school diploma: 6.0%
- If you are a high school graduate but have not attended college: 4.2%
- College or Associate Degree: 3.1%
- Bachelor’s degree or higher: 2.1%
Since today is employment week, there were a total of four reports. The job data was interesting. This means that retirement and hiring rates are now below COVID-19 levels. Federal Reserve BoardTheir policies today are too restrictive because inflation growth is lower than they expected.
However, the labor market has not collapsed. The number of unemployment insurance claims is almost below 200,000. We’re not going to go into full recession mode until this data line crosses his four-week moving average of 323,000. Don’t make the same mistake many on Wall Street made in 2022-2023 by thinking of the economic slowdown as a job-loss recession. We’re not there yet.
Of course, the 10-year bond yield was volatile today. It spiked towards 4.08% but fell to 3.96% following poor performance in ISM services, ending the day at 4.05%. Some may not yet realize how bad ISM Services’ results were, and this could be one reason why bond yields rise significantly in the second half of the data.
Here is a chart of Friday’s pre-employment 10-year yield. Although the trend was down, it reached a key resistance level at 3.80%.
So what happens to the labor market after jobs week? Yes, things are softening, as the job openings and turnover data show. Reports of large job gains are now a thing of the past, and employment growth data is starting to return to normal pre-COVID-19 trends.
Does this mean the labor market is collapsing? No, but we don’t want the Fed to wait for unemployment claims to rise above the four-week rolling average of 323,000 before lowering mortgage rates. So with inflation growth falling faster than expected, I hope the Fed realizes they’ve raised rates too much and needs to cut rates to ground the plane.
