REPLAY | Employment Conference Call | Labor Market (Nov.)—Key to the Economy, Inflation, Fed and Markets – 12/2/22

Posted December 7, 2022 by rvillareal

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• Labor Market in Nov.—Still Strong or Not?  Rebalancing?
  • Jobs, Persons Working, Labor Supply
  • Wages: Any Cost-Push?
  • Where Strong?  Where Weak?
• Economy Implications
  • Q4 Economy and Beyond—Baseline “Soft Landing” (60%); Recession (25%); Growth Recession (10%); Expansion (5%)
  • If a Recession, When?—Mild?  Deep?
• Inflation Implications—Entrenched Sticky-High
  • Wage Costs—Widespread Everywhere
  • Energy Costs—Widespread
  • Food—Widespread Inputs
  • Expected Inflation—Mixed But Likely Unanchored
• Fed Policy Still a 2% Mission But Important Shift
  • Powell Comments and Fed Messaging
  • Interest Rate Hikes—Path and Dosage
  • Endpoint Unknown But No Pivot
  • Long Lags of Monetary Policy Spell Long Period of High Interest Rates
• Financial Markets—Interest Rates, Equities, U.S. Dollar
  • Interest Rate Volatility: On Average, Higher
  • Equity Market—Earnings and Interest Rates Drivers
    – S&P 500 Op EPS Forecast Range
  • S&P 500 Fair Value and Ranges
  • Dollar No Longer Open-Ended Up