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REPLAY | Monthly | Employment Conference Call | Early Summer Labor Market—Still Supertight or Rebalancing? – 7/7/23
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Early Summer Labor Market—Still Supertight or Rebalancing? Fed in a New Shift! “Soft Landing” and “Recession” Odds Change. Markets.
- Labor Market Pre-Summer
(Jun.) Employment Report
- Data—Jobs (Headline Nonfarm Payrolls, Cos.); Hh. Survey (Persons Working, Unemployment Rate); Labor Supply (Labor Force Participation Rate (LFPR), Employment/Population Ratio); Wage Inflation—Average Hourly Earnings (AHE)
- Tight Labor Market Still? Weakening?
- Economy—“Scent”
of a “Soft Landing” More Noticeable, “Recession” Odds Down
- DE Basic Prospect Soft Landing (60% Odds, 55% Before)
- Economy—That “Recession?” (30% Odds, Down From 35%)—Inflation, Financial Fallout Main Risks
- Notable “New” Fed
Shift, Rate Path a Little Higher, Long-Lived, Moderating and Spacing Lower
Dosage Tightenings—Fundamental and Correct!
- FedSpeak—Surprisingly Resilient Economy; Labor Market Surprisingly Tight; Inflation Diminishing but Stubbornly High—More Work Needed for 2%
- Decision Economics, Inc. (DE)Speak—Soft Landing; Supertight Labor Market Fully Employed; Entrenched- and Sticky-High Inflation
- Central Banks—Similar Situations Generally
- Markets—Interest
Rates
- Another 25 bps Fed Funds Rate near End-July; 25 bps Beginning-November
- Inverted Yield Curve Stays
- Dollar Strength
on U.S. Growth and Rates—Especially vs. Yen and Yuan
- Japan Odd Man Out
- Europe, U.K. Raising Rates
- Equity Bull
Market But “Soft”
- S&P 500 Op EPS “Mild” Earnings Recession in 2022-23 and Upturn in 2024, 2025
- New Fair Value Ranges—3900 to 4600 for the S&P 500; Midpoint Fair Value, 4250