REPLAY | Monthly | Employment Conference Call | Labor Market (July) and the Economy – 8/2/24

Posted August 2, 2024 by rvillareal

Labor Market (July) and the Economy

“Cooling” and Rebalancing—But Not “Cold”?

After a Supertight Red Hot couple of years, in recent months the Labor Market has been softening, cooling, rebalancing toward a Pre-COVID state, now with some uncertainty over possible growing downside risk to the Expansion amid continuing sticky-high price inflation.

1) Will the Labor Market Keep Cooling, But Not Turn Cold?

2) Is a Weakening Labor Market Signaling an Expansion Running Out-of-Steam?

3) With Now a 0.7 Percentage Point Increase in the Unemployment Rate Since April (3.4% to 4.1%), is the Unemployment-Inflation Tradeoff (Phillips Curve) Back?

4) Can Price Inflation Keep Moving “Sustainably” Toward the Federal Reserve’s 2% Target?

5) What is Ahead for the Federal Reserve and Monetary Policy?  The July 30-31 FOMC Meeting

Employment Report (July)

• The Data
  • Jobs (Nonfarm Payrolls, Companies); Persons Working, Looking For Work, and the Unemployment Rate (Hh. Survey, Persons)
  • Compensation and Labor Costs—Avg. Hrly. Earnings (AHE)
  • Price Inflation Going Forward—Tilting Down?
  • Unemployment Rate Now and Going Forward—Tilting Up?
• Economy and the Prospect—Q3 and Beyond
  • Baseline (Expansion, Odds 65%);
  • Alternative Scenarios (Recession, Odds 10%; Soft Landing, Fed Forecast, Odds 15%); Boomy Expansion (Odds 10%)
• Fed Policy—FOMC Meeting Results and a Look Ahead
  • FedThink—The Statement and Press Conference
  • Fed Funds Policy Rate Going Forward
• Financial Markets’ Prospects—Short- and Longer-Run
  • Summer Doldrums After a Big Run?  Volatility on “Washington” and “Geopolitics”

Equity Market, Good News Economy Well-Priced, Washington and Geopolitical Risks Spinning

• Dollar Run Up Over?
  • Long-Duration Interest Rates, Debt and the Federal Budget
  • Fair Value S&P 500 Still 5200 to 5800—Midpoint 5500