REPLAY | Monthly | Employment Conference Call | Labor Market and Employment—Still a Puzzle? Where’s the “Recession?” – 10/6/23

Posted October 6, 2023 by rvillareal

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Labor Market and Employment—Still a Puzzle?
Where’s the “Recession?”

• U.S. Labor Market—Still Strong?  How Strong?  How Much Longer Strong?  The “Puzzle” of Why So Strong?
• September Employment Report, Data, and Back-to-School?
  • Jobs (Nonfarm Payrolls)—Persons Working and Unemployment (Hh. Survey)—Wages and Wage Costs (Avg. Hrly. Earngs. or AHE)
  • How to Characterize—Weak?  Solid?  Strong?  Very Strong?
  • Strengths and Weaknesses—Goods vs. Services—Individual Sectors
  • Wage and Comp—Labor Costs and Effects on Inflation
• Implications from the September Labor Market Report
  • Economy—DE Baseline Forecast Still “No Recession” or “Soft Landing”—Basic Prospect (Odds 60%).  Growth, Inflation, Unemployment and Profits
  • “Recession” Odds (30%, Up From 25%)
  • Other Macro Alternatives—Fed Forecast, WSJ Survey (10% Odds)
• Fed Policy Prospect—Further Tightening at a Slower Pace Then a Long Hold
  • Coming Meetings—Funds Rate Up Two More Times-Then Hold at 5-7/8% Through Next Year
  • Risk Even Higher on Embedded “Sticky Inflation” or a Reacceleration
  • FedThink—Economy Strength and Low and Strong Labor Market Makes Continuing “Tight” Monetary Policy the Path—Question is “Real” Rate
• Financial Markets—Labor Market, Fed, and the Markets
  • Repricing in Bond Market from “Expected Inflation”—The DE “Proprietary” Expected Inflation—Breaking-Out in Bond Markets
  • Higher Interest Rates to Stay—Forecasts
  • Dollar Strength Short-Term—Forecasts
  • Equity Market—Fair Value Range and Point Fair Value as Earnings Season Approaches