REPLAY | DE | Monthly | Employment Conference Call | Labor Market and the Economy (August)—Hiring But Not Hiring? – 9/4/20

Posted September 4, 2020 by rvillareal

Labor Market and the Economy (August)— Hiring But Not Hiring?

How the economy goes and whether the nascent Recovery is sustainable depends very much upon the labor market. Jobs and persons working affect income and consumption, production and business costs, with consumer spending and profits driving forces for the expectations of business and its capital spending.

Jobs and persons working have increased significantly over the past three months, in part a bounce up after the Coronavirus Shock that brought an incredible and stunning shedding of jobs and persons working in March and April—over 22 million jobs lost, more than 25 million people no longer working, and the unemployment rate rising to a record-high 14.7%.

Since May, the labor market and other high-frequency economic indicators have suggested a Recovery after the collapse and “Falling Off a Cliff” in the U.S. economy that occurred.

How the labor market goes is key to continued Recovery and an eventual Expansion. On expectations of continuing Recovery, supportive ultra-easy monetary policy and fiscal stimulus, Recoveries in other countries, the equity market has had a striking, stunning, and incredible Bull Run, up 57.6% from the Bear Market low of March 23.

Will the Employment Report for August and its implications support the forward-looking pricing of the U.S. and Global equity market or prove disappointing? If disappointing, either against Consensus expectations or on an absolute basis? Will the labor market suggest increasing risk of a “Double-Dip” Recession, the most likely Macro Alternative Scenario to a sustained Recovery?

How the labor markets go is key to the near-term and potentially longer-term DE Basic Outlook, as a major determinant for the economy and now perhaps the most important determinant for the New Monetary Policy of the Federal Reserve.

There are near-term trading and longer-run financial market implications of every Employment Report, perhaps particularly this one for August.

Conference Agenda Outline

• A “Biden” Bull Market?” Stability Not Uncertainty
  • Earnings and Interest Rates—Key Determinants—Fair Value Ranges