This week served up a mixed bag of employment data, leaving analysts and investors with a lot to chew on. On Wednesday, ADP reported a mere 89,000 new jobs in September—well below Dow Jones predictions and marking the third month of diminishing growth. Fast forward to Friday, and the Bureau of Labor Statistics told a different story. A whopping 336,000 jobs were added in September, crushing both average gains over the last year and Dow Jones expectations.
The latest JOLTS report reveals a thriving job market with 9.6 million openings, offering significant opportunities for both job-seekers and businesses. If you're contemplating a career move, the timing couldn't be better, given the competitive salaries and benefits on the table. However, the tight labor market poses challenges for businesses striving to attract and retain top talent. This robust employment landscape is also impacting broader economic policies, prompting the Federal Reserve to tighten monetary measures. As we navigate this phase of the business cycle, the strong labor market signals that the economy can absorb higher interest rates, at least for now. For a detailed analysis, read the full blog post
An inversion in the bond yield curve is often cited as a red flag for an upcoming recession. This happens when short-term bonds offer higher returns than long-term ones, flipping the norm and signaling market concern. The 10-year and 2-year Treasury Notes, reliable recession predictors, have been inverted for over a year. However, a recession usually kicks in when the yield curve goes back to a more typical, steeper shape. While not a guaranteed recession indicator, an inverting and then steepening yield curve hints that we're entering conditions similar to those before past recessions.