As we speak’s jobs knowledge was dynamite. Not solely did the US add a forecast-smashing 517,000 jobs in January, December’s determine was revised up, the unemployment fee fell to three.4 per cent — the bottom since 1969 — and earnings are rising at a 4.4 per cent annual tempo.
Revisions are probably coming. As Oxford Economics’ Ryan Candy notes:
The surge in job progress in January overstates the power within the job market as employment progress in January incessantly surprises to the upside and doesn’t warrant any change to the change to the baseline forecast.
It’s additionally seemingly that 2Q22 payrolls grew slower than initially reported, as Barclays pointed out this week. Nonetheless, at the moment’s report principally paints an image of a US financial system nonetheless buzzing properly alongside. Which is odd, because a lot of people stated that the US was facing a recession final 12 months, or was already in one. The Heritage Basis even dubbed it “Biden’s Recession”.
The US’s GDP did decline for 2 consecutive quarters final 12 months, the normal definition of a recession. However even when the roles market was weaker than initially reported in 2022, the newest knowledge exhibits that weak spot was shortlived. And the Nationwide Bureau of Financial Analysis hasn’t made an official recession name.
Final 12 months, alternatively, recession vibes had been nearly off the charts. Listed below are Google searches for “recession” exploding, surpassing even the Covid-induced peaks of 2020 and the worldwide monetary disaster in 2008.
The media, as is its wont, didn’t assist:
Family confidence, naturally, slid by way of the 12 months (though inflation might have been a much bigger issue right here):
Even CEOs appear to purchase into the recession narrative. Listed below are mentions of “recession” in earnings calls, which spiked in early 2021 and remained remarkably frequent by way of that 12 months and 2022.
Are we jinxing issues? Fairly presumably, and if the (extremely seen) tech sector is something to go by, some corporations are starting to seek out method to reduce — even when that isn’t translating into the headline figures.
It’s definitely too early to name a ‘comfortable touchdown’. What’s sauce for Joe Biden is . . . not sauce for Jay Powell and the Fed, who have to be worrying concerning the inflationary threats from a good jobs market.
All this week, FTAV’s inbox has been full of commentary about central banks lastly turning a nook on tightening. However what lies past is unknown.